Connect with us

Hi, what are you looking for?

Stock

Pending home sales in April slump to lowest level since the start of the pandemic

Signed sales contracts on existing homes dropped 7.7% in April compared to March, the slowest pace since April 2020, according to the National Association of Realtors.

These so-called pending sales are a forward-looking indicator of closed sales one to two months later. Pending sales were 7.4% lower than in April of last year.

Sales were expected to be flat compared to March.

Since the count is based on signed contracts, it shows how buyers are reacting to mortgage rates in real time. The average rate on the 30-year fixed mortgage ended March at around 6.9% and then took off, hitting 7.5% by the end of April, according to Mortgage News Daily.

With home prices still climbing and supply very low, leading to increased competition, that jump in rates had a huge effect on sales.

“The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market,” said Lawrence Yun, chief economist for the NAR. “But the Federal Reserve’s anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply.”

Sales were down in every region of the country, but they fell hardest in the Midwest and West. The former has some of the most affordable markets in the nation, and the latter has some of the most expensive.

“The prospect of measurable home price declines appears minimal. The few markets experiencing price declines will be viewed as second-chance opportunities for buyers to enter the market if those regions continue to add jobs,” Yun added.

Perhaps in reaction to the slow sales pace in April, the share of sellers cutting prices in May hit 6.4%, the highest level since 2022, according to a new report from Redfin. The median asking price also dropped for the first time in six months.

Active inventory in April was 30% higher than in April 2023, according to Realtor.com, which suggests the summer market could be more active than last year.

“Though inventory and prices are moving in a more buyer-friendly direction, lower mortgage rates will be crucial in bringing both buyers and sellers back into the market,” said Hannah Jones, senior economic research analyst with Realtor.com.

This post appeared first on NBC NEWS

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Enter Your Information Below To Receive Latest News, And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Stock

    The Dow Jones Industrial Average jumped Friday for its best session of the year, as investors wrapped up a strong month after the Federal Reserve’s preferred...

    Latest News

    Manhattan District Attorney Alvin Bragg signaled Friday that he is willing to testify about his prosecution of former President Donald Trump — but not...

    Editor's Pick

    GlobalPlatform takes leading role in helping the IoT ecosystem address regulatory fragmentation and better understand, deploy and promote security. In response to the growing...

    Stock

    Spotify is increasing its prices in the United States for many of its subscription plans. In a statement on its website, the audio streaming...

    Disclaimer: Financetimereport.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2024 Financetimereport.com