Pending home sales declined in April 2019, according to the latest Pending Home Sales Index [1] from the National Association of Realtors (NAR). The Index fell 1.5% to 104.3 in April, down from 105.9 in March, and year-over-year contract signings declined 2%, which the NAR states is the 16th straight month of annual decreases.
"Though the latest monthly figure shows a mild decline in contract signings, mortgage applications and consumer confidence have been steadily rising,” said Lawrence Yun, NAR Chief Economist. “It’s inevitable for sales to turn higher in a few months."
"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.
Yun notes that the sales dip has yet to account for some of the more favorable trends toward homeownership, such as lower mortgage rates. Additionally, he states that the year-over-year increases reported by data from realtor.com could be a sign of a rise in inventory.
"We are seeing migration to more affordable regions, particularly in the South, where there has been recent job growth and homes are more affordable," Yun said.
By metro area, San Jose-Sunnyvale-Santa Clara, California, Seattle-Tacoma-Bellevue, Washington, San Francisco-Oakland-Hayward, California, Portland-Vancouver-Hillsboro, Oregon-Washington, and Nashville-Davidson-Murfreesboro-Franklin, Tennessee, saw the largest increase in active listings in April compared to a year ago.
While affordability is improving, affordability is still a problem for homeowners as well as renters in many metro areas. According to Freddie Mac, the largest metro areas are the most rent-burdened.
“Rental affordability is a significant challenge for metropolitan areas across the United States,” said Steve Guggenmos, VP of Freddie Mac Multifamily Research and Modeling. “The vast majority of the units Freddie Mac finances are affordable. Even so, our research shows that supply just hasn’t kept pace with demand in many metros, and that’s pushing affordable rents out of reach for millions of American families.”