- Prior month 1.7% revised from 1.5%
- Pending home sales (April): +1.4% MoM vs 1.0% estimate.
- Pending home sales (April): +3.2% YoY
Regional breakdown:
- Northeast: +6.6% MoM, -0.6% YoY
- Midwest: +3.0% MoM, +2.7% YoY
- South: -0.7% MoM, +4.7% YoY
- West: +0.4% MoM, +3.8% YoY
Top metro area gains in pending home sales YoY:
- Boston-Cambridge-Newton: +10.3%
- Miami-Fort Lauderdale-West Palm Beach: +9.4%
- Oklahoma City: +8.6%
- Milwaukee-Waukesha: +7.4%
- Virginia Beach-Chesapeake-Norfolk: +7.2%
- Raleigh-Cary: +5.7%
- Dallas-Fort Worth-Arlington: +5.5%
- Washington-Arlington-Alexandria: +5.4%
- Columbus: +5.4%
- Charlotte-Concord-Gastonia: +5.1%
Pending home sales moved modestly higher in April as buyers cautiously stepped back into the housing market despite elevated mortgage rates and broader economic uncertainty. The gain suggests underlying housing demand remains resilient, particularly as buyers continue to adjust to higher financing costs.
The regional data showed broad-based monthly gains outside of the South, while year-over-year activity improved in most areas of the country. The Northeast lagged on an annual basis, but still posted the strongest monthly increase in April.
NAR Chief Economist Lawrence Yun said buyers are showing “cautious optimism,” adding that demand would likely strengthen further if mortgage rates move back toward the lower levels seen earlier this year.
Yun also highlighted ongoing supply concerns. Historically low foreclosure activity has limited distressed sales and reduced opportunities for discounted purchases, helping keep home prices elevated across most markets. Without a meaningful increase in housing supply, rising home prices could continue to outpace wage growth and weigh on housing affordability and homeownership rates.
What is it?
*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
Pending contracts are good early indicators of upcoming sales closings. However, the amount of time between pending contracts and completed sales is not identical for all home sales. Variations in the length of the process from pending contract to closed sale can be caused by issues such as buyer difficulties with obtaining mortgage financing, home inspection problems, or appraisal issues.
The index is based on a sample that covers about 40% of multiple listing service data each month. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.
This article was written by Greg Michalowski at investinglive.com.
