Pending home sales in a slump
Pending home sales in April fell 7.7%, according to the National Association of Realtors. All four U.S. regions registered month-over-month and year-over-year decreases.
The Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings, decreased to 72.3 in April. Year over year, pending transactions were down 7.4%. An index of 100 is equal to the level of contract activity in 2001.
A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
“The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market,” said NAR Chief Economist Lawrence Yun. “But the Federal Reserve’s anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply.”
Here’s the regional breakdown from the NAR
• Northeast: Down 3.5 percent from last month to 62.9, a decline of 3.1 percent from April 2023.
• Midwest: Down 9.5% to 70.7 in April, down 8.7% from one year ago.
• South: Down 7.6% to 88.6 in April, dropping 8.2% from the prior year.
• West: Down 8.5% in April to 55.9, down 7.3% from April 2023.
“Home prices are hitting record highs, but the pace of gains should decelerate with more supply,” said Yun. “However, the prospect of measurable home price declines appears minimal. The few markets experiencing price declines will be viewed as second-chance opportunities for buyers to enter the market if those regions continue to add jobs.”
