Pending home sales in April slump to lowest level since the start of the pandemic
Pending home sales in April slump to lowest level since the start of the pandemic
Slump in U.S. Pending Home Sales in April
Impact of Mortgage Rates
The sharp increase in mortgage rates, rising from 6.9% to 7.5% in April, significantly influenced the decline in pending home sales, making it more difficult for buyers to afford new homes.
Regional Sales Decline
Sales decreased across all U.S. regions, with the most significant drops observed in the Midwest and West, areas known for having the most affordable and most expensive markets, respectively.
Market Outlook
Despite the current slowdown, the market is expected to improve later in the year with anticipated Federal Reserve rate cuts, which could enhance affordability and increase supply.
Inventory and Price Adjustments
As of April, active housing inventory was up by 30% compared to the previous year, and there was a noticeable increase in sellers reducing their asking prices, potentially signaling a shift towards a more buyer-friendly market environment.
What was the percentage decrease in pending home sales in April compared to March, and how does this compare to the same period last year?
The percentage decrease in pending home sales in April compared to March was 7.7%. This is a notable decrease, as pending sales were 7.4% lower than in April of last year. The slowdown in sales is attributed to higher mortgage rates and a persistently low supply of homes, which has led to increased competition among buyers. Despite the decrease, some industry experts believe that the Federal Reserve's anticipated rate cut later this year could lead to better market conditions, with improved affordability and more supply.
Which regions of the country experienced the sharpest declines in home sales, and how are these regions characterized in terms of market affordability?
In April, the regions of the United States that experienced the sharpest declines in home sales were the Midwest and the West4. These regions are distinctly characterized in terms of market affordability. The Midwest is known for having some of the most affordable housing markets in the nation, which typically attracts a range of buyers including first-time homeowners4. On the other hand, the West is recognized for having some of the most expensive housing markets, which can pose affordability challenges and limit the pool of potential buyers. This stark contrast in affordability between the two regions highlights the diverse economic landscapes within the U.S. housing market.