A decline in U.S. pending home sales during March suggested a subdued property market, according to the National Association of Realtors (NAR)
The NAR’s Pending Home Sales Index showed that sales of previously owned homes in the country dropped 0.8% to 111.4, following an increase in the previous month. The index based its figures on the number of signed deals in March.
While the data indicated that sellers held tight to their investment property, the drop still reached below some economists’ expectation.
Economists predicted a 1% drop in pending homes sales for March, as a dearth of available properties may have curbed transactions. The decline may also serve as an indicator that the housing market lost its upward momentum, following an increase in property prices.
According to the NAR, pending home deals turn into sales within two months after signing them. The figure for the end of first quarter signaled that the sector currently grapples with a limited inventory.
Buy or Rent?
When the topic of home sales emerges, it is almost certain that the proverbial issue of buying against renting properties comes into mind. The NAR said that homeownership nationwide gained more traction when existing home sales rose 4.4% in March month over month.
On the other hand, new home sales increased 5.8% for the third consecutive month. In addition, an increasing amount of young first-time buyers are interested in acquiring homes, accounting for 32% in March, according to the NAR.
In response to this demand, home builders have planned to build starter homes for this emerging market.
The positive aspect of knowing about a shortage of housing supply means that prospective sellers may have the upper hand in pricing their investment property. If you plan to do so, it is best to transact with an institutional buyer to get the best deal.