March contract uptick hinted at pent‑up demand even as borrowing costs rose
Pending home sales in the US ticked higher in March, offering lenders and originators a cautiously better pipeline outlook even as mortgage rates drifted back above 6%.
The National Association of Realtors (NAR) reported that its Pending Home Sales Index rose 1.5% month over month but remained 1.1% below year‑ago levels.
Month to month, contract signings increased in the Northeast and South and slipped in the Midwest and West.
On a yearly basis, only the South posted gains, with declines across the Northeast, Midwest and West.
Regionally, March pending deals rose 4.4% in the Northeast but were still down 6.5% from a year earlier, fell 1.3% in the Midwest and 2.6% in the West, and climbed 3.9% in the South, where they were up 2.3% year over year.
Signs of pent‑up demand, shifting to the South
“Contract signings rose in March despite higher mortgage rates, pointing to pent‑up housing demand,” said NAR chief economist Lawrence Yun.
“A greater supply of inventory will help translate that demand into more home sales.”
Yun said first‑time buyers remained the most exposed segment. “Demand sensitivity to mortgage rates is greatest among first‑time buyers, particularly younger buyers,” he said. “As a result, boosting supply and new‑home construction should focus on smaller, more affordable homes.”
He also highlighted the relative resilience of the South. “A good number of markets in the South experienced price cuts over the past year but recorded the strongest job growth,” Yun said. “That combination should lead to stronger housing market activity in the South this year.”
At the metro level, Kansas City, Milwaukee and Austin led double‑digit annual gains in pending contracts, with increases of 14.9%, 13.5% and 12.8% respectively.
They were followed by Phoenix, Raleigh and Portland, which posted gains of 12.1%, 10.0% and 9.7%, with Richmond, Virginia Beach, Dallas–Fort Worth and the Washington, DC region also recording solid advances, according to Realtor.com Economics data.
Rates stayed elevated, but lower than last year
March’s improvement in contracts came as the average 30‑year fixed mortgage rate climbed back above 6%.
Freddie Mac’s Primary Mortgage Market Survey showed the benchmark rate averaged about 6.38% in late March 2026, up from earlier in the month but still below comparable 2025 levels.
What it means for mortgage professionals
When rates eased in late 2025, lower financing costs briefly lifted existing‑home sales and prompted NAR to highlight pent‑up housing demand as buyers reacted quickly to improved affordability.
More recently, by early April 2026, the 30‑year fixed rate ticked up again to around 6.46%, reminding lenders how fragile that demand remains.
The March pending sales uptick therefore pointed less to a breakout and more to an early‑stage recovery defined by regional divergence: the South and parts of the West appeared better positioned to absorb contract activity thanks to relatively stronger supply and job growth, while lean inventory in the Northeast and Midwest continued to cap volumes regardless of rate direction.
Modest gains in pending contracts show that borrowers are still willing to move when inventory improves and rates dip even slightly, but any sustained recovery in originations would depend on builders and sellers delivering more affordable stock into a market where financing costs remain historically high.
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