US Pending Home Sales: Despite March’s decline, index remains at a solid level - Wells Fargo

Analysts from Wells Fargo, explained that pending home sales pulled back 0.8% in March after a robust 5.5% gain in February. According to them, the index remains at a healthy level consistent with further gains in existing home sales.

Key Quotes: 

“Pending home sales edged down in line with market expectations in March, as limited supply weighed on contract signings. Despite the decline, the index remains at a solid level consistent with continued improvement in existing home sales.

“Existing home sales reported a modest first quarter gain of 1.4 percent, suggesting broker commissions on property sales, which feed into the calculation for residential investment, will likely tick up slightly over the quarter.”

“We expect housing to support U.S. economic growth in the first quarter and look for residential investment to rise at a 10.5 percent annualized rate in Q1.”