- Lawrence Yun, the NAR's chief economist
Housing and labour markets are considered by the Fed as key indicators of economic health. At least Ben. S. Bernanke was constantly citing them as main drivers of economic growth. Last week's existing home sales and the number of new homes sold were mixed and did not give a clear indication whether the market is on the mend. Therefore, Monday's pending home sales report was the final set of data.
The National Association of Realtors said contracts to buy already owned homes in the United States soared in March for the first time in nine months, as the latest sign the housing market is stabilizing after a recent wobble. The Pending Home Sales Index climbed 3.4% to 97.4, beating analysts' expectations for a 1.0% gain. This is the highest reading so far this year. A report also showed that sales picked up in three out of four major parts of the economy, boosted by a 5.7% increase in the West. In contrast, the number of pending home sales in the Midwest slipped 0.8% over the observed period.
This economic indicator provides a more timely look at market conditions over the last month, compared with other indicators, as they tally sales at the moment when contracts are signed– usually one or two months later. Economists believe demand for property will strengthen, as the weather improves, even though affordability is likely to remain pinched.
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