Homebuyers across the U.S. surged back into the real estate market in March, taking advantage of falling mortgage rates and fueling the largest jump in pending home sales in over a year.
According to the National Association of Realtors (NAR), the Pending Home Sales Index—which tracks contract signings on previously owned homes—rose sharply by 6.1% in March to a reading of 76.5. That’s the biggest monthly increase since December 2023 and far exceeded economists’ expectations of a modest 1.0% gain.
Despite the strong monthly growth, pending home sales were still 0.6% lower than the same period last year, highlighting the broader challenges the housing market has faced amid high interest rates and limited inventory.
“Home buyers are acutely sensitive to even minor fluctuations in mortgage rates,” said Lawrence Yun, NAR’s chief economist. “While contract signings are not a guarantee of eventual closings, the solid rise in pending home sales implies a sizable build-up of potential homebuyers, fueled by ongoing job growth.”
The spike in contract activity came as mortgage rates retreated from recent highs. Data from mortgage giant Freddie Mac showed the 30-year fixed mortgage rate fell to 6.65% in March, down from a peak of 7.04% in mid-January.
For many would-be buyers who had been sidelined by affordability concerns, the rate drop provided a much-needed opportunity to jump back into the market—especially with the spring homebuying season in full swing.
Pending home sales are considered a leading indicator of future existing-home sales, typically closing within one or two months after contracts are signed. The sharp increase in March suggests stronger home sales activity could be on the horizon in late spring or early summer, provided that mortgage rates remain relatively stable.
Yun noted that continued job growth and steady consumer confidence are giving many buyers the financial footing to move forward, even as prices remain elevated in many markets.
While challenges such as low inventory and still-high borrowing costs persist, the March surge in pending sales shows that buyers are watching the rate market closely—and are ready to act when conditions improve.
If mortgage rates continue to edge downward or remain steady, the real estate market could see more buyers re-entering, potentially giving a much-needed boost to sales volumes and inventory turnover in the coming months.
As the summer homebuying season nears, all eyes will be on mortgage rate trends—and whether this burst of activity marks the start of a broader housing recovery or simply a temporary reprieve.