"Despite supply deficiencies in plenty of areas, contract activity was fairly strong in a majority of markets in March," said Lawrence Yun, chief economist for the Realtors. "This spring's surprisingly low mortgage rates are easing some of the affordability pressures potential buyers are experiencing and are taking away some of the sting from home prices that are still rising too fast and above wage growth."
Pending sales, however, fell in the West, where prices have heated most. Homebuilders also saw steep declines in sales in that region last month, despite low supply of existing homes for sale.
"Demand is starting to weaken in some areas, particularly in the West, where the median home price has risen an astonishing 38 percent in the past three years," added Yun. "As a result, pending sales in the region have now declined in four of the last five months and are lower than one year ago for the third month in a row. Closed sales in the region in March were also below last year's pace."