The hot housing market doesn’t look like it will cool down much this spring.

Pending home sales, a leading indicator of the health of the housing market, rebounded in March, after slipping earlier this year. The National Association of Realtors’ (NAR) Pending Home Sales Index, which tracks the number of homes that are under contract to be sold, rose 1.9% in March from the previous month. The results are far shy of the 4.4% increase that analysts anticipated, according to Bloomberg consensus estimates, but reverses two straight months of decline. In February, pending home sales plunged by about 10%. March contract signings were up 23.3% from the same month a year ago, when the COVID-19 pandemic hit the U.S.

“The increase in pending sales transactions for the month of March is indicative of high housing demand,” said Lawrence Yun, NAR’s chief economist, in a press statement. “With mortgage rates still very close to record lows and a solid job recovery underway, demand will likely remain high.”

Much of the sales activity has been driven by a lack of supply of homes for sale. Total housing inventory at the end of March hit 1.07 million units, down 28.2% from one year ago — near historic lows. Unsold inventory sits at a 2.1-month supply at the current sales pace, marginally up from February’s 2.0-month supply and down from the 3.3-month supply recorded in March 2020.

“Low inventory has been a consistent problem, but more inventory will show up as new home construction intensifies in the coming months, as well as from a steady wind-down of the mortgage forbearance program,” Yun said. “Although these moves won’t immediately replenish low supply, they will be a step forward.”

In March, U.S. homebuilding surged to a nearly 15-year high, according to the Commerce Department. Housing starts surged 19.4% to a seasonally adjusted annual rate of 1.739 million units last month, the highest level since June 2006. Housing starts are expected to reach 1.6 million in 2021 and 1.7 million in 2022, providing some relief to the inventory shortage.

“Pending home sales may have rebounded in March following a weather-driven decline in February. That said, some recent weakness in pending sales...may be an early indication of scarce supply and affordability concerns weighing on sales,” said Nomura in a recent research note.

According to the latest S&P CoreLogic Case-Shiller national home price index released earlier this week, home price growth in the U.S. surged at the fastest pace in 15 years. In March, median existing home prices hit a new high of $329,100, up 17.2% from the same time a year ago — the fastest rate since NAR started tracking prices in 1999. The NAR expects median home price to increase by 9% in 2021 to $323,900.

Amanda Fung is an editor at Yahoo Finance.

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