Pending home sales continued their upward trajectory and increased for the third month straight, staying at the highest level since June 2013, according to the most recent report from the National Association of Realtors.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, grew 1.1% to 108.6 in March from an upward revision of 107.4 in February and is now 11.1% above March 2014 (97.7).

The index has now increased year-over-year for seven consecutive months and is at its highest level since June 2013, when it was 109.4.

Lawrence Yun, NAR chief economist, says contract signings picked up in March as more buyers than usual entered this year’s competitive spring market.

“Demand appears to be stronger in several parts of the country, especially in metro areas that have seen solid job gains and firmer economic growth over the past year,” he said. “While contract activity being up convincingly compared to a year ago is certainly good news, the increased number of traditional buyers who appear to be replacing investors paying in cash is even better news. It indicates this year’s activity is being driven by more long-term homeowners.” 

Yun expects a gradual improvement in home sales in the months ahead but says insufficient supply and accelerating prices could be a drawback to sales reaching their full potential.

“Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer,” he...

Mortgage applications decreased 2.3% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending April 24, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.3% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2% compared with the previous week. The Refinance Index decreased 4% from the previous week.

The seasonally adjusted Purchase Index was unchanged from one week earlier. The unadjusted Purchase Index increased 1% compared with the previous week and was 21% higher than the same week one year ago.

The refinance share of mortgage activity decreased to 55% of total applications, its lowest level since September 2014, from 56% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.7% of total applications. The average loan size for purchase applications rose to a survey high of $297,000.

The FHA share of total applications increased to 13.7% from 13.6% the week prior. The VA share of total applications increased to 11.3% from 11.0% the week prior. The USDA share of total applications remained unchanged at 0.8% from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.85% from 3.83%, with points increasing to 0.35 from 0.32 (including the origination fee) for 80% loan-to-value ratio...