A report released by the National Association of Realtors on Monday showed pending home sales in the U.S. increased by less than expected in the month of March.
NAR said its pending home sales index rose by 0.4 percent to 107.6 in March from a downwardly revised 107.2 in February. Economists had expected pending home sales to climb by 0.9 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Despite the monthly increase, pending home sales in March were down by 3.0 percent compared to the same month a year ago.
“Healthy economic conditions are creating considerable demand for purchasing a home, but not all buyers are able to sign contracts because of the lack of choices in inventory,” said NAR chief economist Lawrence Yun.
“Steady price growth and the swift pace listings are coming off the market are proof that more supply is needed to fully satisfy demand,” he added. “What continues to hold back sales is the fact that prospective buyers are increasingly having difficulty finding an affordable home to buy.”
The increase in pending home sales came as pending sales in the Midwest and South jumped by 2.4 percent and 2.5 percent, respectively.
On the other hand, pending home sales in the Northeast plunged by 5.6 percent and pending sales in the Midwest fell by 1.1 percent.
NAR said Yun forecasts for existing home sales in 2018 to be around 5.61 million, up from 1.8 percent in 2017.
The national median existing home price is expected to increase around 4.4 percent. In 2017, existing sales increased 1.1 percent and prices rose 5.8 percent.