The National Association of Realtors’ Pending Home Sales Index fell by 4.4% month to month to 106.2 in April, continuing a pattern of month-to-month declines. At the same time, pending home sales skyrocketed on a year-over-year basis, up 51.7% from April 2020, when home sales hit an all-time low as a result of the COVID-19 pandemic.
NAR attributes the past month’s slowdown to record low levels of home inventory. “Contract signings are approaching pre-pandemic levels after the big surge due to the lack of sufficient supply of affordable homes,” says Lawrence Yun, NAR’s chief economist. “The upper-end market is still moving sharply as inventory is more plentiful there.”
Yun anticipates that housing supply will improve by autumn, aided by potential sellers’ personal comfort with listing, the end of the eviction moratorium, and properties exiting forbearance.
All four market regions saw YOY gains in pending home sales, but only the Midwest saw pending sales rise on a month-to-month basis—up 3.5% from the previous month and up 39.4% from April 2020. The Northeast PHSI fell by 12.9% in April, with the South seeing a 6.1% decrease and the West falling 2.6%.
“The Midwest region, which has the most affordable homes, was the only region to notch a gain in the latest month,” Yun says. “Some buyers from the expensive cities in the West and Northeast, who have the flexibility to move and work from anywhere, could be opting for a larger-sized home at a lower price in the Midwest.”
Out of the largest 40 metros, Realtor.com’s Hottest Housing Markets list named Detroit-Warren-Dearborn, Michigan; Tampa-St. Petersburg-Clearwater, Florida; Austin-Round Rock, Texas; Jacksonville, Florida; and Riverside-San Bernardino-Ontario, California, as the most improved metro areas over the past year, as of May 13.
