They’re buying houses all of a sudden! Or at least signing contracts to buy houses.
I don’t know who “they” are, though, because in my experience, “they’re” broke. And houses are hellaciously expensive.
Pending home sales rose a remarkable 6.1% in March, according to NAR data released on Wednesday. That was the strongest advance since January of 2023, and it blew away every estimate. Consensus expected a small uptick.
This index, you’re reminded, made a series of new record lows over the past nine months, so God knows it’s nice to see the kind of rebound illustrated above. The question’s whether it’s sustainable. We’ve seen more false dawns from US housing than I can remember since 2022.
This is, of course, the spring buying season, when families set about touring other families’ old digs, usually with the outgoing family’s furniture still in the home. (“Jesus, what causes that kind of stain?”)
NAR chief economist Lawrence Yun — who last week lamented the extent to which America’s housing affordability crunch threatens to morph into a society-wide economic mobility crisis — on Wednesday said March “typically brings in a surge of home buyers and sellers compared to the winter months.” Contract singings jumped more than 34% from February on non-seasonally-adjusted basis. Inventories rose as well.
The hopeful data comes on the heels of figures showing existing home sales (so closings, not signings) fell sharply in March, while prices continue to rise.
Separately, the MBA said Wednesday the average 30-year fixed was mostly unchanged over the week up near 7%.
Recall that the Trump administration made some progress towards brings financing costs down, but The White House squandered ~half of the drop when Trump’s botched tariff unveil inadvertently triggered one of the most acute Treasury selloffs in living memory.
“Mortgage application activity, particularly for home purchases, continues to be subdued by broader economic uncertainty and signs of labor market weakness,” MBA VP Joel Kan said Wednesday. Application volume, he went on, is the slowest in months.
I’ve been browsing Zillow and Redfin for multifamily (apartment duplexes and triplexes, on the ‘inexpensive’ end of the spectrum $250-500k) in my area of North Jersey, plus some in original home turf of Philly suburbs and South Jersey. I’m seeing a LOT of these that have been on the market for extended periods (as little as 30 days up to 3-6 months) with price drops. We recently sold inherited single family –that needs tons of work– and was on market for an asking price a good $150k more than my estimate and sold over ask, north of $650k. I’m surmising that the fortunate are grabbing the homes they want, rates be damned, but that average and first time RE investors are sitting out. I stopped listening to RE podcasts recently, so not sure what the zeitgeist is, but I’m curious now to listen again to see. Maybe a good time to sit and wait for lower prices on that end of the market.
Any numbers that show the effects on the second home market, particularly East Coast Jersey to Florida?