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By Kerry Smith<\/div><\/div>\n

It marks \u201csix consecutive months of declines and the slowest pace in nearly a decade,\u201d says NAR\u2019s chief economist. Year-to-year, pending sales were down 9.1%.<\/span><\/span><\/p>\n<\/div>\n

WASHINGTON \u2013 Pending home sales slipped in April, as contract activity decreased for the sixth consecutive month, according to the National Association of Realtors\u00ae (NAR).<\/span><\/span><\/p>\n

Of the four U.S. regions in NAR\u2019s study, only the Midwest region saw signings increase month-over-month as the other three m reported declines. Year-to-year, all four regions\u2019 pending sales declined.<\/span><\/span><\/p>\n

The Pending Home Sales Index (PHSI) \u2013 a forward-looking indicator of home sales based on contract signings \u2013 slid 3.9% to 99.3 in April. Year-over-year, transactions fell 9.1%. An index of 100 is equal to the level of contract activity in 2001.<\/span><\/span><\/p>\n

\u201cPending contracts are telling, as they better reflect the timelier impact from higher mortgage rates than do closings,\u201d says Lawrence Yun, NAR\u2019s chief economist. \u201cThe latest contract signings mark six consecutive months of declines and are at the slowest pace in nearly a decade.\u201d<\/span><\/span><\/p>\n

With mortgage rates rising, Yun forecasts existing-home sales to wane by 9% in 2022 and home price appreciation to moderate to 5% by year\u2019s end.<\/span><\/span><\/p>\n

\u201cThe escalating mortgage rates have bumped up the cost of purchasing a home by more than 25% from a year ago, while steeper home prices are adding another 15% to that figure.\u201d<\/span><\/span><\/p>\n

In some cases, the higher rates increase mortgage payments by as much as $500 per month. Yun says that the level of price hikes is already a burden, but it becomes even more problematic to families on a budget already contending with rapid inflation, including surging fuel and food costs.<\/span><\/span><\/p>\n

\u201cThe vast majority of homeowners are enjoying huge wealth gains and are not under financial stress with their home as a result of having locked into historically low interest rates, or because they are not carrying a mortgage,\u201d Yun says. \u201cHowever \u2013 in this present market \u2013 potential homebuyers are challenged and thus may attempt to mitigate the rising cost of ownership by opting for a 5-year adjustable-rate mortgage or by widening their geographic search area to more affordable regions.\u201d<\/span><\/span><\/p>\n

Yun notes that more work-from-home opportunities have allowed would-be buyers to expand their home search.<\/span><\/span><\/p>\n

It\u2019s possible, however, that the market will soon start to improve for buyers, Yun says.<\/span><\/span><\/p>\n

\u201cIf mortgage rates stabilize roughly at the current level of 5.3% and job gains continue, home sales could also stabilize in the coming months,\u201d Yun says. \u201cHome sales in 2022 are expected to be down about 9%, and if mortgage rates climb to 6%, then the sales activity could fall by 15%.<\/span><\/span><\/p>\n

\u201cHome prices in the meantime appear in no danger of any meaningful decline,\u201d he continued. \u201cThere is an ongoing housing shortage, and properly listed homes are still selling swiftly \u2013 generally seeing a contract signed within a month.\u201d<\/span><\/span><\/p>\n

Regional breakdown<\/strong>: Month-over-month, the Northeast PHSI fell 16.20% to 74.8 in April, a 14.3% drop from a year ago. In the Midwest, the index rose 6.6% to 100.7 last month, down 2.8% from April 2021.<\/span><\/span><\/p>\n

Pending home sales transactions in the South dipped 4.7% to an index of 119.0 in April, down 10.3% from April 2021; and the index in the West slipped 4.3% in April to 85.9, a 10.5% decrease year-to-year.<\/span><\/span><\/p>\n

\u00a9 2022 Florida Realtors\u00ae<\/span><\/span><\/p>\n<\/div><\/div>\n

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\nAuthor: kerrys<\/p>\n","protected":false},"excerpt":{"rendered":"