-- US pending home sales increased more than expected last month despite higher mortgage rates, data from the National Association of Realtors showed Tuesday.
The forward-looking indicator of home sales based on contract signings increased 1.5% month over month in March. Analysts expected a 0.5% gain, according to a survey compiled by Bloomberg.
"Contract signings rose in March despite higher mortgage rates, pointing to pent-up housing demand," NAR Chief Economist Lawrence Yun said. "A greater supply of inventory will help translate that demand into more home sales."
The average 30-year fixed mortgage rate was 6.3% in the week ended April 16, down from a nearly seven-month high two weeks earlier, Freddie Mac data showed.
"Demand sensitivity to mortgage rates is greatest among first-time buyers, particularly younger buyers," Yun said. "As a result, boosting supply and new-home construction should focus on smaller, more affordable homes."
Sequentially, pending home sales increased in the Northeast and South, while the Midwest and West saw declines.
On Monday, Redfin said US home sellers exceeded buyers by an estimated 43% in March, a near-record percentage.