Optimists believe spring will be a good time for the real estate market. As reported by “The National Association of Realtors,” momentum is building, and the Pending Home Sales Index is increasing. March was the third straight month that enjoyed a positive upswing. The index is currently at its highest level since June 2013.
Positive attitudes in the real estate industry stem from today’s high number of executed home purchase contracts. Economists are encouraged by the number of pending sales. Thanks to economic growth and heightened job opportunities, home demand appears to be very strong in important parts of the country.
Lawrence Yun, chief economist for NAR, explains that contract activity definitely has seen a boost, which is great news. Even better is the fact traditional buyers are replacing cash investors. This shows activity is being pushed by long-term investors.
Unfortunately, every up brings a down. It appears the high demand in many markets is exceeding supply. March sales were more than last year’s summer months. This has elevated house prices to unhealthy levels. In many parts of the country, real estate costs have grown at least four times as much as wage increases. In order to improve affordability, inventory for new and existing homes must increase as well.
Statistics show good news for sales. They are up 0.6 percent from last year at this time in the Northeast. The Midwest index is 11.3 percent higher than it was one year ago. In the South, sales are up 12.4 percent from last year. The West enjoys the highest annual increase of 15.6 percent. Hopefully, this trend will continue.