According to reporting from The National Association of Realtors, April pending home sales were, by and large, unchanged from the previous month during what is typically one of the busiest home-buying months of the year, highlighting the stalemate between buyers and sellers defining the current housing market. While three out of four major U.S. regions saw gains, numbers in the Northeast pulled down the national average.
NAR’s Pending Home Sales Index remained at 78.9 between March and April, but dropped by 20.3 percent from the previous year according to new data.
“Not all buying interests are being completed due to limited inventory,” NAR Chief Economist Lawrence Yun said in a statement. “Affordability challenges certainly remain and continue to hold back contract signings, but a sizeable increase in housing inventory will be critical to get more Americans moving.”
Three out of four major United States regions saw pending home sales increase month over month. Pending sales in the South were up 0.1 percent from March but down 16.7 percent from the previous year. The West index jumped 4.7 percent in April, but slid 26 percent from 2022, while the Midwest’s pending sales measure went up 3.6 percent in April, but was down 21.4 percent from the previous year.
The Northeast posted the only monthly decrease, dropping 11.3 percent from March and 21.8 percent from April 2022.
Mortgage rates coming in at 20-year highs have resulted in a highly unusual spring housing market with extremely low inventory and a large portion of would-be sellers reluctant to sell their home and give up their lower mortgage rate.
“The housing market looks different than it does during a typical spring, when the market is usually in full gear,” Bright MLS Chief Economist Lisa Sturtevant said in a statement. “Elevated mortgage rates and economic uncertainty, along with still-low inventory, means that new pending sales were down more than 20 percent from a year ago, and were lower even compared to 2019 levels.”
While contract signings remained flat, April saw new home sales reach a 13-month high as buyers flocked to new-build housing amid a shortage of existing inventory.
Pending home sales represent the number of homes that have gone under contract in a given month but have not yet finalized their sale. They are considered the most reliable indicator of where the housing market is headed in the weeks and months to come.