April’s Pending Home Sales Plunge 7.7%

 

  • Overall Decline in Pending Home Sales:
    • Pending home sales in April fell 7.7%.
    • All four U.S. regions registered month-over-month and year-over-year decreases.
  • Pending Home Sales Index (PHSI):
    • The PHSI, 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.
  • Impact of Interest Rates:
    • Escalating interest rates throughout April dampened home buying despite more inventory in the market.
    • The Federal Reserve’s anticipated rate cut later this year should improve conditions, affordability, and supply.
  • Regional Breakdown:
    • Northeast: PHSI fell 3.5% from last month to 62.9, a decline of 3.1% from April 2023.
    • Midwest: Index dropped 9.5% to 70.7 in April, down 8.7% from one year ago.
    • South: PHSI lowered 7.6% to 88.6 in April, dropping 8.2% from the prior year.
    • West: Index decreased 8.5% in April to 55.9, down 7.3% from April 2023.
  • Home Prices and Supply:
    • Home prices are hitting record highs, but the pace of gains should decelerate with more supply.
    • Measurable home price declines are minimal.
    • Markets experiencing price declines may offer second-chance opportunities for buyers if those regions continue to add jobs.

Source: NAR