April brought no change in pending home sales, according to the National Association of Realtors.
NAR’s Pending Home Sales Index remained at 78.9 in April, the same reading as in March. An index of 100 is equal to the level of contract activity in 2001.
Year-over-year, pending sales dropped by 20.3%.
“Not all buying interests are being completed due to limited inventory,” said NAR Chief Economist Lawrence Yun. “Affordability challenges certainly remain and continue to hold back contract signings, but a sizeable increase in housing inventory will be critical to get more Americans moving.”
Analysts differ on when inventory will be correct.
ATTOM Data’s Rick Sharga told Bankrate not to expect a big inventory boost anytime soon. But Robert Johnson, a professor of finance at Creighton University’s Heider College of Business, expects that some homeowners will be forced to move this year.
“Many reluctant sellers — those waiting for the market to turn around — will likely capitulate, adding to more housing supply,” he told Bankrate.
Experts agrees that more inventory won’t result in huge price drops, though. If anything, prices will decline only slightly. In a high rate environment, that will do little to ease affordability constraints.
Rates averaged 6.57% this week, inching up as inflation cools and the debt ceiling crisis appears to be coming to an end, sending Treasury yields up. As a result, purchase applications slumped this month.
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