Pending Home Sales Drop In April Amid The Ongoing Housing Shortage

The National Association of Realtors (NAR) is reporting that pending home sales for April decreased for the first time in three months.  NAR used a Pending home sales index which saw their reading drop to 106.4 for April.  The drop was 1.3% from March which saw the index level at 107.8.  Pending home sales have been adversely affected the the shortage of available housing available as the levels of housing is considered "dire" at this point.

Pending Home Sales Index is an indicator based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing according to NAR.
Lawrence Yun, chief economist doesn't see a change in sight unless more new and existing home sales hit the market.  The market is being affected by higher mortgage rates, increase home sales prices  and increased gas prices will affect the market ahead.  He states

“Pending sales slipped in April and continued to stay within the same narrow range with little signs of breaking out. Feedback from Realtors, as well as the underlying sales data, reveal that the demand for buying a home is very robust. Listings are typically going under contract in under a month, and instances of multiple offers are increasingly common and pushing prices higher. The unfortunate reality for many home shoppers is that reaching the market will remain challenging if supply stays at these dire levels.”

“The combination of paying extra at the pump, while also needing to save more for a down payment because of higher rates and home prices, may weigh on the psyche of those looking to buy.  For now, the economy is very healthy, job growth is holding steady and wages are slowly rising. However, it all comes down to overall supply. If more new and existing homes are listed for sale, it would allow home prices to moderate enough to stave off inflationary pressures and higher rates.”

It should be noted that although the inventory shortage, Yun still predicts an increase of existing home sales of .5 percent to 5.54 million.  Also of note in our region, the index indicates no change in the pending home sales index as it remained at 90.6.  This is 2.1 percent the same period last year.

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

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