Despite declining mortgage rates, pending home sales retreated 1.5% in April, according to the latest report from the National Association of Realtors.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, fell to 104.3 in April, falling from March’s 105.8.
Additionally, year-over-year contract signings declined 2%, marking the 16th consecutive month of annual decreases.
In fact, activity in the four major regions varied as the PHSI in the Northeast, South and West declined and the Midwest rose.
These are the PHSI changes for each region:
- Northeast: Decreased 1.8% to 88.9 and is 2.1% lower than April 2018
- Midwest: Increased 1.3% to 96.8 but fell 2.4% from April 2018
- South: Decreased 2.5% to 124 and is 1.8% lower than April 2018
- West: Decreased 1.8% to 93.5 and is 1.5% lower than April 2018
NAR’s Chief Economist Lawrence Yun said the sales dip has yet to account for some of the more favorable trends toward homeownership, such as lower mortgage rates.
“Though the latest monthly figure shows a mild decline in contract signings, mortgage applications and consumer confidence have been steadily rising,” Yun said. “It’s inevitable for sales to turn higher in a few months.”
Yun also noted that although home price appreciation has soared on the lower-end, upper-end conditions continue to soften.
“Home price appreciation has been the strongest on the lower-end as inventory conditions have been consistently tight on homes priced under $250,000. Price conditions are soft on the upper-end, especially in high tax states like Connecticut, New York and Illinois,” Yun said. “The supply of inventory for homes priced under $250,000 stood at 3.3 months in April, and homes priced $1 million and above recorded an inventory of 8.9 months in April.”