Pending home sales took a step backward in April, according to the National Association of Realtors. All four U.S. regions recorded year-over-year increases, but only the Midwest witnessed month-over-month gains in terms of 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 percent to 106.2 in April. Year-over-year, signings jumped 51.7 percent as last year’s pandemic-related shutdowns slumped sales to an all-time low. 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,” said Lawrence Yun, NAR’s chief economist. “The upper-end market is still moving sharply as inventory is more plentiful there.”
Yun anticipates housing supply to improve as a whole as soon as autumn. He points to an increase in the comfortability of those listing, as well as a rise in sellers after the conclusion of the eviction moratorium or as they exit forbearance.
Realtor.com’s Hottest Housing Markets data revealed that out of the largest 40 metros, the most improved metros over the past year, as of May 13, were Detroit-Warren-Dearborn, Michigan; Tampa-St. Petersburg-Clearwater, Florida; Austin-Round Rock, Texas; Jacksonville, Florida; and Riverside-San Bernardino-Ontario, California.
“The Midwest region, which has the most affordable homes, was the only region to notch a gain in the latest month,” Yun noted. “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 percent to 85.3 in April, a 96.5 percent jump from a year ago. In the Midwest, the index increased 3.5 percent to 101.1 last month, up 39.4 percent from April 2020.
Pending home sales transactions in the South fell 6.1 percent to an index of 128.9 in April, up 45.3 percent from April 2020. The index in the West decreased 2.6 percent in April to 92.0, up 57.3 percent from a year prior.