U.S. Pending Home Sales Surge 6.1% in March: A Sign of Market Revival
Pending home sales in the United States saw a notable rebound in March 2025, climbing 6.1% compared to the previous month—the strongest month-over-month gain in over a year. This increase marks a potential turning point in a housing market that has been constrained by affordability issues and limited inventory in recent months. According to the National Association of Realtors (NAR), the jump brought the Pending Home Sales Index up to 76.5, a level that surprised many analysts who had only forecasted a 1% increase.
This growth in contract signings represents more than just an encouraging statistic; it suggests growing optimism among homebuyers and a potential easing of the slowdown that has gripped the real estate market. One of the key drivers behind this momentum was a drop in mortgage rates. After hovering above 7% at the start of the year, the average 30-year fixed mortgage rate fell to 6.65% by mid-March, offering potential buyers some financial relief and making home purchases more attainable.
Lawrence Yun, Chief Economist at NAR, emphasized the importance of this rate drop. “March’s Pending Home Sales Index reveals that buyers are coming back into the market as interest rates ease. There is clearly a substantial pent-up demand, and with job creation continuing, we expect a more stable recovery as we move deeper into the year,” he stated. Yun added that the rebound in contract activity suggests increased confidence and buying power among consumers.
Regional Highlights
The surge in pending home sales was not uniform across the country, though the South saw the largest jump at 9.8%. This region, which includes high-demand states like Florida, Texas, and the Carolinas, continues to benefit from population growth, relatively affordable housing, and favorable weather. The Midwest followed with a 4.9% increase, while the West rose 4.8%. The only region to see a decline was the Northeast, which dipped by 0.5%—potentially reflecting tighter inventory levels or localized economic conditions.
Compared to the same time last year, overall pending sales were down just 0.6%, indicating that the market is beginning to stabilize after several volatile quarters. The Midwest was the only region to post a year-over-year increase (+1.4%).
Inventory and Buyer Behavior Trends
While lower mortgage rates played a big role in March’s gains, more available inventory also contributed to the increased activity. Sellers are gradually returning to the market, encouraged by rising home values and seasonal demand. Buyers, on the other hand, remain price-sensitive and selective, which has led to price adjustments in many markets across the country.
Economists caution that while the latest numbers are a step in the right direction, the housing market is still contending with long-term affordability issues, especially in high-cost metros. Additionally, continued volatility in interest rates, uncertainty about inflation, and ongoing discussions around the Federal Reserve’s monetary policy may continue to influence market behavior in the coming months.
Looking Ahead
If the trend of moderating mortgage rates continues and inventory levels improve further, the second half of 2025 could see even stronger housing activity. Builders are also playing a role in easing constraints by bringing more new homes to market, especially in suburban and Sunbelt areas.
The bottom line? March’s spike in pending home sales suggests that the housing market is slowly emerging from its cooldown. While challenges remain, especially for first-time buyers, the latest data indicates renewed buyer interest and greater market activity on the horizon.