Pending home sales climbed in April both on a monthly and annual basis, signaling that the spring housing market is finding its footing despite rising mortgage rates and lingering geopolitical uncertainty.
Contract signings were up 1.4% month over month and 3.2% year over year, according to the National Association of Realtors® Pending Home Sales report.
NAR Chief Economist Lawrence Yun said the latest data signals market resilience despite economic headwinds.
“Buyers are coming out with cautious optimism despite increasing economic uncertainty and a slight rise in mortgage rates,” he said. “Demand will easily be even higher once mortgage rates retreat to the levels they were at earlier this year.”
Month-over-month pending home sales rose in the Northeast (6.6%), Midwest (3%), and West (0.4%), but ticked down in the South (-0.7%). Annually, contract signings increased in the South (4.7%), West (3.8%), and Midwest (2.7%), and slightly retreated in the Northeast (0.6%).
At the metro level, Boston (+10.3%), Miami (+9.4%), and Oklahoma City, OK (+8.6%) led all major markets in year-over-year pending sales growth.
Mortgage rates fell through April after a rocky start, dropping from a seven-month high of 6.46% to as low as 6.23% before ending around 6.3%, roughly half a percentage point below where they stood a year ago.
Realtor.com® senior economist Hannah Jones says that year-over-year advantage has preserved some buying power, although she points out that the ongoing conflict in the Middle East and subsequent economic anxiety have kept a lid on buyer enthusiasm.
Despite these challenges, Jones says the monthly and annual increases in pending home sales indicate that shoppers are making the most of a growing selection of for-sale homes and easing price growth.
April saw for-sale inventory improve 4.6% from a year ago, although the rate of improvement continued to slow.
Meanwhile, new listings climbed 1.1% annually and picked up 8.7% month over month as asking prices continued to ease, now down year over year for six consecutive months.
Jones notes that the share of active listings with a price cut actually declined year over year, suggesting sellers are adjusting expectations before listing rather than after.
“Taken together, the April data reflects a seller cohort willing to engage and doing so with more realistic pricing, a meaningful contrast to last spring’s standoff,” adds the economist.
However, Yun warned of potential trouble ahead.
“Historically low foreclosure sales imply minimal price discounts, with a majority of markets selling at a higher price from a year ago,” said the NAR expert. “Unless supply meaningfully increases, home price growth could outpace wage growth and further erode the homeownership rate. All efforts need to be focused on boosting housing supply.”
Jones also stresses that the market is watching the inflation picture closely. April’s Consumer Price Index rose 3.8% annually, the highest reading in nearly three years, and core inflation accelerated to 2.8% as elevated energy costs began bleeding into other categories.
“Higher inflation generally puts upward pressure on mortgage rates, which have already started drifting back above 6.3% in early May,” she says. “Beyond rates, inflation running ahead of wage growth means household budgets are being squeezed, a dynamic that could dampen buyer confidence heading into the traditionally active summer months.”
Metros with biggest pending home sale increases in April
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Boston, MA (+10.3%)
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Miami, FL (+9.4%)
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Oklahoma City, OK (+8.6%)
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Milwaukee, WI (+7.4%)
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Virginia Beach, VA (+7.2%)
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Raleigh, NC (+5.7%)
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Dallas–Fort Worth, TX (+5.5%)
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Washington, DC (+5.4%)
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Columbus, OH (+5.4%)
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Charlotte, NC (+5.1%)
