WASHINGTON – May 30, 2019 – Pending home sales declined in April in a modest change from the growth seen a month before, according to the National Association of Realtors® (NAR). Only one of the four major regions – the Midwest – experienced growth, while the remaining three regions reported a drop in their respective contract activity.
The Pending Home Sales Index (PHSI) – a forward-looking indicator based on contract signings – fell 1.5% to 104.3 in April, down from 105.9 in March. Year-over-year contract signings declined 2.0%, making April the 16th straight month of annual decreases.
“Though the latest monthly figure shows a mild decline in contract signings, mortgage applications and consumer confidence have been steadily rising,” says NAR Chief Economist Lawrence Yun. “It’s inevitable for sales to turn higher in a few months.”
Yun says a tight inventory of lower-end homes and an increasing number of higher-end homes are part of the equation.
“Home price appreciation has been the strongest on the lower-end as inventory conditions have been consistently tight on homes priced under $250,000,” he says. “Price conditions are soft on the upper-end, especially in high tax states like Connecticut, New York and Illinois.”
The supply of inventory for homes priced under $250,000 stood at 3.3 months in April; homes priced $1 million and above recorded an inventory of 8.9 months in April.
“We are seeing migration to more affordable regions, particularly in the South, where there has been recent job growth and homes are more affordable,” Yun says.
April pending home sales regional breakdown
The PHSI in the Northeast declined 1.8% to 88.9 in April and is now 2.1% below a year ago. In the Midwest, the index grew 1.3% to 96.8 in April, 2.4% lower than April 2018.
Pending home sales in the South fell 2.5% to an index of 124.0 in April, which is 1.8% lower than last April. The index in the West dropped 1.8% in April to 93.5 and fell only 1.5% below a year ago.
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