March’s further fall in home sales is a potentially worrying sign that the improvement in housing market activity is already petering out. But we are encouraged by the fact that pending home sales are still increasing strongly. Admittedly, pending home sales can be cancelled, but taken at face value the data point to renewed gains in home sales. The recovery in housing demand is one reason why we believe that house prices are either very close to, or already through, their trough. Indeed, on the CoreLogic measure, seasonally adjusted house prices rose by 0.7% m/m in March, the third consecutive monthly gain.
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