Pending Home Sales Fall 1.5 Percent in April
With only one of the four major regions experiencing growth in April, pending home sales declined 1.5 percent from April to March. But Lawrence Yun, NAR chief economist, remains positive. “Though the latest monthly figure shows a mild decline in contract signing, mortgage applications and consumer confidence have been steadily rising,” he said. “It’s inevitable for sales to turn higher in a few months.”
Home price appreciation comes into play, with the supply of inventory for homes priced above $1 million at 8.9 months and homes priced below $250,000 at 3.3 months. “Home price appreciation has been the strongest on the lower-end as inventory conditions have been consistently tight on homes priced under $250,000. Price conditions are soft on the upper-end, especially in high tax states like Connecticut, New York and Illinois,” Yun explains.
Yun attributes the year-over-year increases to a potential rise in inventory, with the following regions experiencing the largest increase in active listings in April compared to last year: San Jose-Sunnyvale-Santa Clara, Calif., Seattle-Tacoma-Bellevue, Wash., San Francisco-Oakland-Hayward, Calif., Portland-Vancouver-Hillsboro, Ore.-Wash., and Nashville-Davidson-Murfreesboro-Franklin, Tenn. “We are seeing migration to more affordable regions, particularly in the South, where there has been recent job growth and homes are more affordable,” said Yun.
From a regional standpoint, the Midwest was the only region to experience growth in April, with the index growing 1.3 percent, which is still 2.4 percent lower than last year’s numbers. Pending home sales in the Northeast fell 1.8 percent, 2.1 percent below last year; the South declined 2.5 percent, 1.8 percent lower than last year; and the West dropped 1.8 percent, just 1.5 percent below last year.