Pending Home Sales Slumped In April

Pending home sales dropped to a four-year low in April, reversing an uptick in March.

NAR’s Pending Home Sales Index fell by 7.7% month-over-month to a reading of 72.3 last month, its lowest point since April 2020 and far lower than analyst expectations. An index of 100 is equal to the level of contract activity in 2001.

Year-over-year, sales were down 7.4% and in all four regions. The Midwest (-9.5%) and West (-8.5%) experienced the largest monthly declines, though the Northeast (-3.5%) and South (-7.6%) didn’t fare much better.

“The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market,” said 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.”

April brought the highest rates of the year, with the 30-year fixed rate hitting 7.24%. Rates have moderated since then but remain close to 7%.

At the same time, average home prices are skyrocketing, making buyers’ barrier to entry even higher.

Buyers have backed off in response, and some desperate sellers are increasingly slashing their list prices to attract attention. Across the country, 6.4% of home sellers cut their asking price during the four weeks ending May 26, the highest share since November 2022. 

“The market is slower than usual, but well-maintained properties listed for under a million dollars still get multiple offers,” said Christine Chang, a Bay Area Redfin Agent.

“People who are buying right now are typically doing so because they’re having a baby or looking for a more family-friendly home.”

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