Pending home sales pop in March
By region, pendings rose 1.2% in the Midwest and 1.9% in the West. They surged 12.7% in the South, but dipped 3.3% in the Northeast. At 102.9, the pending sales index is up 21% from the year-earlier level.
The latest pending home sales figures confirm that rising affordability and the home buyer tax credit are helping to underpin housing demand. Sales rose nicely in the biggest regional housing market -- the South -- with less robust gains in the Midwest and West.
The key question remains: "What happens now that the credit has expired?" I have no doubt we'll see some giveback in sales. But as I've maintained before, I don't expect some new market crash. Cheap homes and cheap financing, as well as a turn in the broader economy, argue for a continued stabilization in market conditions. Not a robust recovery, but a gradual reduction in inventory for sale, a gradual upturn in sales and construction activity and a stabilization in pricing later in the year.