By Shaina Mishkin

An early sign of future home sales climbed in March, logging its biggest monthly increase since December 2023. It's a sign that home buyers are eager for deals -- but it doesn't mean the housing market is roaring back to life.

Pending home sales -- an index that tracks contract signings to buy previously owned homes -- increased a seasonally adjusted 6.1% in March from the previous month, the National Association of Realtors said Wednesday. Consensus estimates compiled by FactSet had anticipated a smaller gain. The index was 0.6% lower than the same month last year.

"While contract signings are not a guarantee of eventual closings, the solid rise in pending home sales implies a sizable build-up of potential home buyers, fueled by ongoing job growth," NAR chief economist Lawrence Yun said.

There being more homes on the market likely helped. There were 1.33 million homes for sale at the end of March, according to other Realtors group data, up 20% from the year prior.

The pending sales data show buyers are eager to take advantage of good deals when they see them -- and some seized the opportunity when mortgage rates dipped in March.

"Home buyers are acutely sensitive to even minor fluctuations in mortgage rates," Yun said.

The average 30-year fixed mortgage rate in March was about 0.2 percentage point lower than in February and 0.3 percentage point lower than in January, according to weekly Freddie Mac data. That kind of decline can shave nearly $1,000 a year off the payment on a $400,000 loan.

By the same token, recent mortgage rate fluctuations show the increase in pending sales might not last. In April, mortgage rates increased an average 0.07 percentage point, with rates jumping in the middle of the month to about 6.8% from about 6.6%. The gains followed movements in 10-year Treasury yields after tariff news shook the bond market.

Write to Shaina Mishkin at shaina.mishkin@dowjones.com

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April 30, 2025 10:00 ET (14:00 GMT)

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