Pending home sales fell 7.7% in April from March, according to the National Association of Realtors (NAR).
There were month-over-month decreases in all four U.S. regions, with the NAR’s Pending Home Sales Index (PHSI) decreasing to 72.3.
"The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market," commented 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."
Year-over-year, pending transactions were down 7.4%.
“Pending home sales slumped in April, signaling weakening demand as mortgage rates surpassed 7%, dampening affordability and keeping home buyers out of the market,” First American Deputy Chief Economist Odeta Kushi said. “While inventory has picked up, you can't buy what you can't afford.”
The Northeast PHSI fell 3.5% from last month to 62.9, a decline of 3.1% from April 2023. The Midwest index dropped 9.5% to 70.7 in April, down 8.7% from one year ago. The South PHSI lowered 7.6% to 88.6 in April, dropping 8.2% from the prior year. The West index decreased 8.5% in April to 55.9, down 7.3% from April 2023.
The pace of price appreciation has decelerated this spring due to a pullback in demand, with prospective homebuyers waiting for lower mortgage rates to make the jump into ownership.
“The decision to buy a home comes down to a payment-to-paycheck calculation, which is influenced by income, mortgage rates, and house prices,” Kushi pointed out. “While house prices continue to reach new heights, more supply amid a pullback in demand means the pace of price appreciation has decelerated, and will likely continue to do so if this supply-demand dynamic persists.
