Pending home sales fell 6.3% in April compared with March and were down 2% compared with April 2024, according to the National Association of Realtors (NAR).
Regionally, and month over month, pending home sales decreased 0.6% in the Northeast, 5% in the Midwest, 7.7% in the South and 8.9% in the West.
“At this critical stage of the housing market, it is all about mortgage rates,” says Lawrence Yun, chief economist for NAR, in a statement. “Despite an increase in housing inventory, we are not seeing higher home sales. Lower mortgage rates are essential to bring home buyers back into the housing market.”
“Home buyers have a better chance to purchase homes in affordable regions such as the Midwest, where the typical home price is $313,000 – 25 percent below the national median home price,” Yun adds. “Moreover, with housing inventory levels reaching five-year highs, home buyers in nearly every region of the country are in a better position to negotiate more favorable terms.”
“Pending home sales in April took a nosedive, marking the steepest month-over-month drop since September 2022, as rising mortgage rates dampened consumer buying power in April,” says Odeta Kushi, deputy chief economist for First American, in a separate statement. “Adding to the woes, economic uncertainty continues to keep potential buyers on the sidelines. The pending home sales data continues to point to a frozen housing market, with transaction activity bouncing along the bottom.
“Elevated mortgage rates and economic uncertainty are headwinds for the housing market,” Kushi adds. “However, rising inventory, which puts downward pressure on prices and allows incomes to catch up, serves as a tailwind.”
Photo: Phil Hearing