According to the National Association of Realtors, pending home sales in April experienced a 7.7% decrease from the previous month. All four regions of the United States saw declines in both month-over-month and year-over-year comparisons, with the West and Midwest experiencing the steepest drops.
The Pending Home Sales Index (PHSI), an indicator of future home sales based on contract signings, dropped to 72.3 in April – its lowest level since the start of COVID-19 pandemic four years ago. Compared to last year, pending transactions were down by 7.4%. The index uses a baseline value of 100 set at contract activity levels from 2001.
In April, PHSI for Northeast fell by 3.5% compared to March’s numbers at a rate of decline that was also seen over last year’s figures (-3/1%). In Midwest region too there was significant drop as it went down by almost double digits (9/5%) reaching only up till seventy point seven this time around while showing eight point seven percent dip when compared against same period during previous fiscal cycle which is not good news for real estate market here either way you look at it . South PHSI decreased significantly as well with a fall off about eight percent coming out ninety points six mark but still lower than what we had seen before so far making things difficult all round especially given how low inventory has been lately due largely because people are now more willing wait longer periods before buying homes these days thanks partly due higher interest rates being offered banks right now .
CNBC reporter Diana Olick noted that since this count relies on signed contracts rather than closed deals ,it provides insight into how buyers are responding immediately mortgage rate changes . Average rates for thirty-year fixed mortgages ended March around six-point-nine-percent then rose again towards end-of-April hitting high note near seven-point-five-percent “With rising prices coupled limited supply, competition has increased significantly,” Olick wrote.
Lawrence Yun, chief economist for the NAR, commented on the situation stating that “escalating interest rates throughout April had a dampening effect on home buying despite an increase in inventory.” However, he also mentioned that with the Federal Reserve planning to cut rates later this year , conditions are expected to improve with more affordable options and greater supply.
The article titled “Pending Home Sales Reach Four-Year Low in April” was originally published by Connect CRE.
