The Economy

Pending Home Sales Hit 10-Year High in April

There are now more homes under contract than at any time since February 2006, says the NAR.
Matthew HellerMay 27, 2016

Pending home sales in the U.S. reached their highest level in April since before the real estate crash, the latest indication of a strong spring home-buying season.

The National Association of Realtors said Thursday its seasonally adjusted pending home sales index surged 5.1% last month to 116.3 as Americans signed more contracts to buy homes for the third straight month. On a year-to-year comparison, pending home sales are up 4.6%.

There are now more homes under contract than at any time since February 2006, according to NAR. Economists surveyed by Sell Your Home had expected pending home sales to rise 0.7% in April.

“April is often a bellwether month for how the spring and year will wind up,” realtor.com’s chief economist, Jonathan Smoke, said. “We saw almost a half-million new listings come onto the market in April, so buyers appear to be jumping on the fresh inventory.”

Lawrence Yun, NAR chief economist, said steady job growth and low long-term mortgage rates “appear to be bringing more interested buyers into the market.”

“Even if rates rise soon, sales have legs for further expansion this summer if housing supply increases enough to give buyers an adequate number of affordable choices during their search,” he said, adding that he expects sales this year to climb above earlier estimates and be around 5.41 million, up 3.0% from 2015.

NAR reported that vast gains in the South and West fueled pending home sales in April. Sales in the South jumped 6.8% while sales in the West soared 11.4%.

“We’re seeing the uptick in the spring selling market,” San Diego realtor Michael Wolf told realtor.com. “This year, it happened to be a little more intense than other years.”

As the WSJ reports, other recent housing-related data “have so far signaled a strong spring selling season, but have prompted concerns that scarce inventory could cap further improvement in the market.” Sales of existing homes rose in April for the second straight month, but that left 4.7 months’ supply at the end of the month, down 3.6% from April a year ago.