Contract signings for homes were lackluster in April, dragged down by a steep decline in the Northeast, data from the National Association of Realtors showed Thursday.
The NAR said that pending home sales were flat with the previous month after falling March. Compared with a year ago, pending sales are down 20.3 percent.
Wall Street had mixed expectations for April’s pending sales. The consensus estimate was for a 0.8 percent increase but some analysts were predicting a decline of as much as 2.9 percent, according to Econoday. The top of the range of estimates was growth of 3.2 percent. The width of the range of estimates show just how unpredictable the housing market has become.
Realtors say that a lack of homes available for sale is holding back the market.
“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.”
High mortgage rates have been putting pressure on both propsective buyers and current homeowners. Many homeowners locked in low interest mortgages before the Federal Reserve started hiking and would face much higher rates on their next home. That keeps inventory low, which pushes up prices. High prices and high rates make affordability a challenge for many would-be buyers.
The NAR’s index for pending home sales in the Northeast dropped sharply. The Midwest and West indices both improved on a month-over-month basis. The gauge of pending sales for the South ticked up slightly.
Pending home sales typically become finalized 45 to 60 days later. They are viewed as a leading indicator for the housing market.
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