Pending Home Sales Ascended 3.4% in March

Pending home sales in March climbed 3.4% according to recently released data. The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – increased to 78.2 in March. Year over year, pending transactions were up 0.1%. An index of 100 is equal to the level of contract activity in 2001.

March's Pending Home Sales Index marks the best performance in a year, but it still remains in a fairly narrow range over the last 12 months without a measurable breakout. Meaningful gains will only occur with declining mortgage rates and rising inventory.

Forecasts predict that existing-home sales will rise by 9% in 2024 to 4.46 million (from 4.09 million 2023) and another 13.2% in 2025 to 5.05 million (from 2024). Housing starts are expected to rise by 1.2% in 2024 to 1.43 million (from 1.413 million in 2023) and 4.9% to 1.5 million in 2025 (from 2024).

Home sales have lingered at 30-year lows, and since 70 million more Americans live in the country now compared to three decades ago, it's inevitable that sales will rise in coming years, Inventory will grow steadily from more home construction, and various life-changing events will require people to trade up, trade down or move to another location.

According the economists, home prices are expected to rise roughly in line with consumer price inflation and wage growth over the next two years, Most homeowners are on strong financial footing in current market conditions, with only 2% of sales classified as being distressed.

Local experts in Northeast Ohio expect home sales to steadily improve while home prices continue to hit record highs. Job gains, steady mortgage rates and the release of inventory from pent-up home sellers will lead to more sales, Given the lingering housing shortage, home prices will march higher, albeit much more slowly than in the past.

What this means to you is that it's still a strong seller's market locally. I have sellers who have been able to dictate the exact terms they desire when facing multiple offers (including leaving all of the furniture in the home for the buyer to discard). On the buy side. the aggressive buyers willing to take my advice (appraisal gaps, price escalations, assuming some violations, etc.) are still able to best the competition and get their next home under contract. I'm even seeing 7+ offers on a new listing being the norm again!

Who do you know that's looking to buy, sell, or invest in 2024? I'd love to see if I can help them achieve their goals. Please call or text me!