WASHINGTON (May 30, 2024) – Home sales contracts fell 7.7% in April, according to the National Association of Realtors. All four U.S. regions recorded declines both month-over-month and year-over-year.
The Pending Home Sales Index (PHSI)*, a forward-looking indicator of home sales based on contract signings, fell to 72.3 in April. Pending transactions were down 7.4% from a year ago. An index of 100 corresponds to the level of contract activity in 2001.
“Home buying slowed during April as interest rates rose, even as inventory built up in the housing market,” said NAR chief economist Lawrence Yun. “But the Federal Reserve’s planned rate cuts later this year should improve homebuyability, increase supply and improve housing conditions.”
Pending home sales by region
The Northeast PHSI fell 3.5% month-over-month to 62.9, down 3.1% from April 2023. The Midwest index fell 9.5% in April to 70.7, down 8.7% from a year ago.
The Southern PHSI fell 7.6% in April to 88.6, a decline of 8.2% from a year ago. The Western Index fell 8.5% in April to 55.9, a decline of 7.3% from April 2023.
“Home prices have reached record highs, but the pace of increase should slow as supply increases,” Yoon said. “However, the likelihood of any visible home price declines is minimal. The few markets that do see price declines could be viewed as an opportunity for buyers to enter the market if job growth in the area continues.”
About the National Association of Realtors
The National Association of Realtors is America’s largest trade association with 1.5 million members involved in all aspects of the residential and commercial real estate industry. The term REALTOR® is a registered collective membership mark that identifies real estate professionals who are members of the National Association of Realtors and who adhere to the association’s strict code of ethics.
*The Pending Home Sales Index is a leading indicator for the housing sector based on the number of pending sales of existing homes. A sale is listed as pending if a contract has been signed but the transaction has not yet closed, however, sales typically close within one to two months of signing.
A pending sale is a good early indicator of an upcoming closing. However, the length of time from pending sale to closing is not the same for all home sales. Variations in the length of the pending sale to closing process could be due to issues such as a buyer having difficulty obtaining mortgage financing, home inspection issues, appraisal problems, etc.
The index is based on a sample covering approximately 40% of the monthly multiple real estate information service data. In developing the index model, it was demonstrated that the level of monthly sales contract activity corresponds to the level of existing home sales closings over the following two months.
An index of 100 corresponds to the average level of contract activity in the first year covered in the study, 2001. Coincidentally, existing home sales in 2001 fell in the range of 5 million to 5.5 million, which is considered normal for the current U.S. population.
NOTE: Existing Home Sales for May will be released on June 21. The next Pending Home Sales Index will be released on June 27. All release times are 10:00 a.m. ET. See the NAR statistical news release schedule.
