US pending home sales fell 1.3% to a reading of 106.4 in April, the National Association of Realtors said Thursday.
NAR’s index of pending home sales hit a three-month low in April. The index tracks real-estate transactions in which a contract has been signed, but the transaction hasn’t closed.
Meanwhile, in April, existing home sales fell 2.5% to an annualized rate of 5.46 million. On its own, this is not a remarkable story. What is more notable is the persistence of a trend that has come to define the U.S. housing market since it bottomed in 2012. And that is the lack of supply.
US Home Sales, House Prices
The latest results show US pending home sales may struggle to gain much traction in coming months. A limited number of for-sale properties is keeping prices elevated at a time when mortgage rates have climbed to an almost seven-year high. Such headwinds make home ownership more difficult for some prospective buyers. Nonetheless, a healthy job market and lower taxes are expected to underpin housing demand. Data released last week showed existing-home sales fell in April to a three-month low.
Signings dropped in three of four regions, led by a 3.2% decline in the Midwest; fell 1% in the South and 0.4% in the West, while sales agreements were unchanged in the Northeast.
Realtors called the lack of homes for sale a “crisis” earlier in the year and there’s no relief in sight. Sales of previously-owned homes slumped in April as shoppers found slim pickings.
Contract signings precede sales by approximately 45 to 60 days, so this report signals the next batch of existing-home sales data could also disappoint.
Homes stayed on the market for 26 days in April, down from 30 days in February and 29 days a year ago.
The April all-cash sales share was 21% in April, compared to 20% in March and unchanged from a year ago. Individual investors purchased a 15% share in April, unchanged from last month and a year ago.
The April median sales price of US$257,900 was up 5.3% from a year ago, representing the 74th consecutive month of year-over-year increases. The April median condominium/co-op price of US$242,500 was up 3.4% from a year ago, according to the data from the National Association of Realtors.
Additionally, the amount of homes for sale fell over the prior year for the 35th consecutive month to a total of 1.8 million.
The first-time buyer share of 33% was an increase from last month, but remains down from 34% a year ago. The National Association of Realtors reported that 57% of homes sold last month were on the market less than a month.
At the current selling rate, which in April hit an annualized pace of 5.46 million, there are just 4 months of unsold inventory on the market and homes were for sale for just 26 days in April with 57% of homes sold remaining listed for less than a month.
Yet elsewhere, house prices across the US went up by 6.5% in March year-over-year, according to the Wall Street Journal, which took its data from the S&P CoreLogic Case-Shiller National Home Price Index. The biggest gains were in western cities such as Seattle, Las Vegas, and San Francisco, which saw respective jumps of 13%, 12.4% and 11.3%.
Low inventory is a major factor in price increases, as the supply of houses is close to its lowest level in decades. David Blitzer of S&P Dow Jones Indices told the Journal that prices will likely keep going up unless this changes.
“Until inventories increase faster than sales, or the economy slows significantly, home prices are likely to continue rising,” he said