Lack of Existing Home Inventory a “Major Constraint”

Pending Home Sales fell 5.2% from February to March, which was much weaker than expectations and marks the first monthly decline since November. Sales were also down 23.2% from a year earlier. Pending Home Sales is a critical report for taking the pulse of the housing market. The data is considered a forward-looking indicator of home sales because it measures signed contracts on existing homes, which represent around 90% of the market.

What’s the bottom line? Recent data showed that there were nearly 200,000 fewer active listings at the end of March than there were in November. Lawrence Yun, chief economist for the National Association of REALTORS®, confirmed, “The lack of housing inventory is a major constraint to rising sales. Multiple offers are still occurring on about a third of all listings, and 28% of homes are selling above list price. Limited housing supply is simply not meeting demand nationally."