This morning the National Association of Realtors released the March data for their Pending Home Sales Index. Here is an excerpt from the latest press release:

Lawrence Yun, NAR chief economist, says contract activity is moving sideways and not breaking higher despite the strong job-creating economy. "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," he said. "Steady price growth and the swift pace listings are coming off the market are proof that more supply is needed to fully satisfy demand1. What continues to hold back sales is the fact that prospective buyers are increasingly having difficulty finding an affordable home to buy."

Added Yun, "As anticipated, the multiple winter storms and unseasonably cold weather contributed to the decrease in contract signings in the Northeast." (more here).

The chart below gives us a snapshot of the index since 2001. The MoM came in at 0.4%, down from a 2.8% increase last month. had a forecast of 0.6%.

Pending Home Sales

Over this time frame, the US population has grown by 15.4%. For a better look at the underlying trend, here is an overlay with the nominal index and the population-adjusted variant. The focus is pending home sales growth since 2001.

Pending Home Sales Growth

The index for the most recent month is 15% below its all-time high in 2005. The population-adjusted index is 24% off its 2005 high.

Pending versus Existing Home Sales

The NAR explains that "because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing Home Sales by a month or two." Here is a growth overlay of the two series. The general correlation, as expected, is close. And a close look at the numbers supports the NAR's assessment that their pending sales series is a leading index.