Affordability stings April pending home sales
An underwhelming affordable home supply, a trend that has haunted the housing market for over a year, put another dent in the latest pending home sales report.
Pending home sales are down 1.5% for April, according to the latest Pending Home Sales Index (PHSI) released by the National Association of Realtors (NAR).
A forward-looking indicator based on contract signings, the PHSI dropped to 104.3 last month from 105.9 in March. Year-over-year contract signings declined 2%, making the 16th straight month of annual decreases.
"Though the latest monthly figure shows a mild decline in contract signings, mortgage applications and consumer confidence have been steadily rising,” said Lawrence Yun, NAR chief economist. “It’s inevitable for sales to turn higher in a few months."
By region, the PHSI in the Northeast declined 1.8% to 88.9 in April and is now 2.1% below a year ago. In the Midwest, the index grew 1.3% to 96.8 in April, 2.4% lower than April 2018.
Pending home sales in the South fell 2.5% to an index of 124 in April, which is 1.8% lower than last April. The index in the West dropped 1.8% in April to 93.5 and fell only 1.5% below a year ago.
Affordability, or a lack of, continues to be a theme when it comes to sales.
"Home price appreciation has been the strongest on the lower-end as inventory conditions have been consistently tight on homes priced under $250,000. Price conditions are soft on the upper-end, especially in high tax states like Connecticut, New York and Illinois,” Yun said.
The supply of inventory for homes priced under $250,000 stood at just 3.3 months in April. But homes priced at $1 million and above recorded an inventory of 8.9 months for the month.
San Jose-Sunnyvale-Santa Clara, Calif., Seattle-Tacoma-Bellevue, Wash., San Francisco-Oakland-Hayward, Calif., Portland-Vancouver-Hillsboro, Ore.-Wash., and Nashville-Davidson-Murfreesboro-Franklin, Tenn., saw the largest increase in active listings in April compared to a year ago.
"We are seeing migration to more affordable regions, particularly in the South, where there has been recent job growth and homes are more affordable," Yun said.
Pending home sales are down 1.5% for April, according to the latest Pending Home Sales Index (PHSI) released by the National Association of Realtors (NAR).
A forward-looking indicator based on contract signings, the PHSI dropped to 104.3 last month from 105.9 in March. Year-over-year contract signings declined 2%, making the 16th straight month of annual decreases.
"Though the latest monthly figure shows a mild decline in contract signings, mortgage applications and consumer confidence have been steadily rising,” said Lawrence Yun, NAR chief economist. “It’s inevitable for sales to turn higher in a few months."
By region, the PHSI in the Northeast declined 1.8% to 88.9 in April and is now 2.1% below a year ago. In the Midwest, the index grew 1.3% to 96.8 in April, 2.4% lower than April 2018.
Pending home sales in the South fell 2.5% to an index of 124 in April, which is 1.8% lower than last April. The index in the West dropped 1.8% in April to 93.5 and fell only 1.5% below a year ago.
Affordability, or a lack of, continues to be a theme when it comes to sales.
"Home price appreciation has been the strongest on the lower-end as inventory conditions have been consistently tight on homes priced under $250,000. Price conditions are soft on the upper-end, especially in high tax states like Connecticut, New York and Illinois,” Yun said.
The supply of inventory for homes priced under $250,000 stood at just 3.3 months in April. But homes priced at $1 million and above recorded an inventory of 8.9 months for the month.
San Jose-Sunnyvale-Santa Clara, Calif., Seattle-Tacoma-Bellevue, Wash., San Francisco-Oakland-Hayward, Calif., Portland-Vancouver-Hillsboro, Ore.-Wash., and Nashville-Davidson-Murfreesboro-Franklin, Tenn., saw the largest increase in active listings in April compared to a year ago.
"We are seeing migration to more affordable regions, particularly in the South, where there has been recent job growth and homes are more affordable," Yun said.