Number of contracts to buy homes at highest level since May

More Americans signed contracts to buy homes in March as the spring home buying season got underway.

The National Association of Realtors said Wednesday that its seasonally adjusted pending home sales index rose 1.4 percent to 110.5, the highest level since May 2015.

Pending sales rose 3.2 percent last month in the Northeast and 3 percent in the South. After rising sharply over the past three years, states in the West registered a 1.8 percent decline in pending home sales last month and a 7.9 percent drop over the past year. Contracts were flat in the Midwest, rising just 0.2 percent last month.

Pending sales contracts are a barometer of future purchases. A sale is typically completed a month or two after a contract is signed.

Last month's uptick came despite a limited supply of homes on the market, said Lawrence Yun, chief economist for the Realtors.

The housing market has been helped by low mortgage rates. The 30-year fixed rate mortgage last week stood at 3.59 percent, near its low for the year. The 15-year fixed rate mortgage last week slipped to 2.85 percent, the lowest since May 2013.

The Standard & Poor's/Case-Shiller 20-city home price index rose 5.4 percent in February from a year earlier as buyers competed for scarce homes, according to a report released Tuesday.

The Realtors said last week that sales of existing homes rose 5.1 percent in March to a seasonally adjusted annual rate of 5.33 million, a partial rebound after a sudden drop in February.

But the Commerce Department reported Monday that sales of new homes slipped 1.5 percent in March to a seasonally adjusted annual rate of 511,000. Sales plunged in the pricey West, which is prone to volatile swings in sales.

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