Year-to-year, however, pending sales skyrocketed 51.7% since April 2020 was the start of nationwide lockdowns to fight a spreading pandemic. NAR Economist Yun says contract signings now are near pre-pandemic levels after the big surge during COVID-19 lockdowns.
WASHINGTON – Pending home sales took a step backward in April, according to the National Association of Realtors® (NAR). All four U.S. regions saw year-over-year increases, but only the Midwest had month-over-month gains in pending home sales contract transactions.
The Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings – fell 4.4% to 106.2 in April. Year-over-year, signings, however, jumped 51.7% higher, in part because April 2020 had a wave of pandemic-related shutdowns. An index of 100 is equal to the level of contract activity in 2001.
“Contract signings are approaching pre-pandemic levels after the big surge due to the lack of sufficient supply of affordable homes,” says Lawrence Yun, NAR’s chief economist. “The upper-end market is still moving sharply as inventory is more plentiful there.”
Yun thinks that housing supply will improve as soon as autumn. He points to an increase in the comfortability of homeowners more willing to list their homes, as well as a rise in sellers who might have to make difficult decisions after the eviction moratorium expires and their mortgage forbearance comes to an end.
“The Midwest region, which has the most affordable homes, was the only region to notch a gain in the latest month,” Yun adds. “Some buyers from the expensive cities in the West and Northeast, who have the flexibility to move and work from anywhere, could be opting for a larger-sized home at a lower price in the Midwest.”
April pending home sales regional breakdown: The Northeast PHSI declined 12.9% to 85.3 in April, though it was up 96.5% jump from a year ago. In the Midwest, the index increased 3.5% to 101.1 last month, up 39.4% compared to April 2020.
Pending sales transactions in the South fell 6.1% to an index of 128.9 in April, up 45.3% from April 2020. In the West, the index decreased 2.6% in April to 92.0, up 57.3% from a year prior.
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