Pending homes salesin the U.S. rose 1.4% month over month in March to a reading of 110.5 on the NationalAssociation of Realtors' pending home sales index, compared to a downwardly revised109.0 in February.
The March mark wasthe highest level recorded since May 2015. Year over year, the index was up 1.4%.
"Despite supplydeficiencies in plenty of areas, contract activity was fairly strong in a majorityof markets in March," NAR chief economist Lawrence Yun said in a news release."This spring's surprisingly low mortgage rates are easing some of the affordabilitypressures potential buyers are experiencing and are taking away some of the stingfrom home prices that are still rising too fast and above wage growth."
Yun said that pricesare rising beyond the affordability of a growing share of households due to a lagin single-family home construction in recent years that is starting to affect "sometop job producing markets."
"Demand is startingto weaken in some areas, particularly in the West, where the median home price hasrisen an astonishing 38 percent in the past three years," Yun said. "Asa result, pending sales in the region have now declined in four of the last fivemonths and are lower than one year ago for the third month in a row. Closed salesin the region in March were also below last year's pace."