Residential Real Estate News
Pending Home Sales in U.S. Increase in March
Strongest month-over-month gain in 2 Years, but flat annually
According to the National Association of Realtors (NAR), U.S. pending home sales jumped 6.1% in March 2025 -- the largest month-over-month increase since December 2023, when they rose 7.0%. Regionally, the Northeast saw a slight decline in transactions, while the Midwest, South, and West posted gains, with the South experiencing the most significant growth. Compared to a year ago, contract signings were up in the Midwest but declined in the Northeast, South, and West, with the Northeast showing the steepest drop.
The Pending Home Sales Index (PHSI) -- a leading indicator of future home sales based on contract signings -- increased to 76.5 in March, up 6.1% from the previous month. However, on a year-over-year basis, pending transactions were down 0.6%. A PHSI level of 100 corresponds to contract activity in 2001.
"Homebuyers are highly responsive to even small changes in mortgage rates," said NAR Chief Economist Lawrence Yun. "While not every signed contract results in a closing, this strong uptick in pending sales signals a growing pool of prospective buyers, driven by steady job gains."
Yun added, "Spring typically brings more activity to the housing market compared to the winter. In March, non-seasonally adjusted contract signings rose 34.1% from February--mirroring trends seen in past years. Inventory also increased 8.1% month-over-month, suggesting a more active and competitive housing market."
Mortgage rates declined by approximately 20 to 30 basis points in March compared to earlier in the year. The average mortgage rate was 6.65% in March, down from 6.96% in January and 6.84% in February.
Regional Highlights - March 2025
- Northeast: The PHSI slipped 0.5% to 62.5, a 3.0% decrease from March 2024.
- Midwest: The index rose 4.9% to 77.7, up 1.4% from a year ago.
- South: Pending sales surged 9.8% to 94.1, though slightly down 0.4% year-over-year.
- West: The index increased 4.8% to 58.6, but was still 2.0% lower than March 2024.
