April was not a great month for the housing market, as sales of both newly built homes and existing homes slowed down. And now, it looks like that slow down likely continued into May and perhaps beyond.
New data from the National Association of Realtors shows that pending home sales, an indicator of future home sales based on signed real estate contracts, fell in April. That marks the third month out of the last four that pending home sales have declined.
Pending home sales fell in both January and February, before rising in March by just 1.9%. That uptick was short-lived, as pending home sales fell back in April by 4.4%.
As for why the decline was seen in April, it’s the same refrain it has been for many months: inventory, inventory, and inventory. To put it simply, there just aren’t enough homes on the market to meet the demand.
However, according to NAR Chief Economist Lawrence Yun, the inventory issue isn’t quite as serious in some segments of the market.
"Contract signings are approaching pre-pandemic levels after the big surge due to the lack of sufficient supply of affordable homes," Yun said. "The upper-end market is still moving sharply as inventory is more plentiful there."
According to Yun, inventory is expected to increase as the calendar approaches the cooler months, which should help ease the inventory crunch.
Broken down by region, pending home sales fell in each region of the U.S. except for the Midwest, where home prices make buying a home a bit easier.
"The Midwest region, which has the most affordable homes, was the only region to notch a gain in the latest month," Yun said. "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."
New data from the National Association of Realtors shows that pending home sales, an indicator of future home sales based on signed real estate contracts, fell in April. That marks the third month out of the last four that pending home sales have declined.
Pending home sales fell in both January and February, before rising in March by just 1.9%. That uptick was short-lived, as pending home sales fell back in April by 4.4%.
As for why the decline was seen in April, it’s the same refrain it has been for many months: inventory, inventory, and inventory. To put it simply, there just aren’t enough homes on the market to meet the demand.
However, according to NAR Chief Economist Lawrence Yun, the inventory issue isn’t quite as serious in some segments of the market.
"Contract signings are approaching pre-pandemic levels after the big surge due to the lack of sufficient supply of affordable homes," Yun said. "The upper-end market is still moving sharply as inventory is more plentiful there."
According to Yun, inventory is expected to increase as the calendar approaches the cooler months, which should help ease the inventory crunch.
Broken down by region, pending home sales fell in each region of the U.S. except for the Midwest, where home prices make buying a home a bit easier.
"The Midwest region, which has the most affordable homes, was the only region to notch a gain in the latest month," Yun said. "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."