Pending home sales lift, but momentum could be ‘cut short’ 

Homebuying activity gained a bit of momentum last month even as mortgage rates climbed and widespread uncertainty about the war in Iran bloomed.

Pending sales tick up: Pending sales increased 1.5% month-over-month in March, according to the National Association of Realtors. Despite the improvement over February, last month's data still came in 1.1% below one year earlier, when the spring homebuying season was dragging amid significantly higher 30-year mortgage rates.

The increase from February to March could be attributed to buyers opting to lock in rates and sign contracts before conditions worsen, suggested Realtor.com Senior Economist Anthony Smith, who noted that pending sales typically turn into closed sales a month or two later.

"Despite the upward drift, rates remained roughly half a percentage point below the same period last year, preserving much of the year-over-year buying power gains that have quietly been accumulating," Smith said.

So far this week, 30-year mortgage rates have held steady around 6.3%, according to Mortgage News Daily. Stocks and oil prices also remained relatively flat as the U.S.-Iran ceasefire deadline loomed and last-minute talks occurred.

'Stronger' market activity expected in the South: The South was the only region to experience year-over-year growth in March, according to NAR, while pending sales ticked up on a month-to-month basis in the South and the Northeast. These differences reflect a fragmented market heading into the peak homebuying season.

"A good number of markets in the South experienced price cuts over the past year but recorded the strongest job growth," noted Lawrence Yun, chief economist at NAR. "That combination should lead to stronger housing market activity in the South this year."

Uncertainty holds as Iran war continues: If the Iran war ends soon and energy prices start falling, the housing market would still have a few meaningful advantages compared to last spring, according to Smith. In addition to comparatively lower mortgage rates, there is more housing inventory now than in early 2025 — and price cuts are occurring in many markets.

Meanwhile, sellers outnumber buyers by a significant margin nationally, a factor that could also lead to stronger negotiating leverage in many markets, according to a recent Redfin report.

But the Iran conflict and rising mortgage rates could lead to a repeat of last spring, Smith noted, which showed early promise before buyers pulled back amid widespread economic uncertainty due to tariffs. "The risk is that this progress gets cut short," Smith said.