US pending homes rise 1.5pc in March.

Contracts to purchase previously owned US homes rose at a faster-than-expected clip in March, according to the National Association of Realtors, but higher mortgage rates and constrained supply continued to weigh on the housing market.

Source: Sharecast

The NAR's ‌pending home sales index rose 1.5% to 73.7 in March, easily surpassing consensus estimates for a 0.5% increase. On an annualised basis, pending home sales dropped 1.1% .

Contracts rose across the Northeast and the South, but ⁠fell in the West and Midwest regions.

March's increase also comes as rates rose throughout the month as the US and Israel's conflict with Iran sent oil prices rocketting, with the popular 30-year fixed mortgage rate averaging 6.38% at the end of March, up from an average of 5.98% at ‌the ⁠end of February.

"Demand sensitivity to mortgage rates is greatest among first-time buyers, particularly younger buyers," said NAR chief economist Lawrence Yun. "As a result, boosting supply and new-home construction should focus on smaller, more affordable homes."

Reporting by Iain Gilbert at Sharecast.com

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