In March, the housing market exhibited a notable uptick, with the number of homes going under contract increasing by 4.6% compared to the same month last year, as reported by Zillow. This increase occurred amidst rising mortgage rates, which have sparked new concerns related to inflation and oil prices. At the beginning of March, mortgage rates were below 6%—a low not seen in several years—but by the end of the month, they had climbed to 6.38%, according to data from Freddie Mac.
While deals under contract do not guarantee that sales will be completed, the rising numbers indicate a potential revival in the housing sector. Additionally, the active inventory of homes for sale rose by 4.2% year-on-year, suggesting that more sellers are entering the market and buyers are benefiting from a broader selection of properties.
This data for March serves as an early indicator that both buyers and sellers may be starting to engage more actively in the housing market. Economists had previously expressed optimism at the year’s outset, hoping for a stabilisation in the housing market after three years marked by sales at near-historic lows. However, the recent spike in mortgage rates has introduced uncertainty into this outlook.
In summary, the housing market is showing signs of renewal in March with an increase in contracts and inventory, despite rising mortgage rates creating a mix of optimism and concern among economists and investors alike.
