Pending Home Sales Increase but Remain Short of Expectations

We all know it by now; the market hasn’t been quite where we expected it to be at this point in the year. It’s been a somewhat disappointing spring for many of us in the RE community, and while we’ve seen stagnancy across most aspects of the real estate, April has brought some improvements – the newest of which is a small bump in pending home sales. While these recent improvements have remained subtle, they’re a promising sign that things will turn around in the remainder of the year.
According to the National Association of Realtors, buyers signed 0.4% more contracts for previously owned homes in April than in March. This news comes just days after the U.S. Department of Commerce announced that newly built single-family home sales had increased by 6.4% in April from the month prior – the first increase since January.

April’s pending sales increase–although missing expectations of a 1% rise–was the second straight monthly gain. Previously, pending sales had declined for nine consecutive months.

While this is an encouraging sign, pending sales still remain relatively low compared to the previous year, when the group’s index was 9.2% higher.
The lack in sales is in part due to buyers struggling to afford a home, as affordability continues to be a major issue since the run-ups of last year. This may become less of a problem in upcoming months though, as there have been signs that buyers are beginning to adjust.

According to Lawrence Yun, the NAR’s chief economist, home sales will likely trend higher, stating that, “Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective home buyers’ confidence.”

Do you think this is a sign of the market picking up once again, or are we bound for more months of flat sales? We’d love to hear your thoughts!

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