Pending-home sales dropped 4.4 percent in April from the month before to a Pending Home Sales Index (PHSI) of 106.2, according to a report released on Thursday by the National Association of Realtors (NAR).
The index is an indicator of future home sales based on contract signings. An index of 100 represents the level of contract activity from 2001.
Contract signings were still up 51.7 percent year over year, however, highlighting the stark contrast between this past April when widespread shutdowns due to the pandemic slowed homeselling to a crawl, and this year, as large swaths of the country dropped COVID-19 restrictions and began resuming many more normal activities.
“Contract signings are approaching pre-pandemic levels after the big surge due to the lack of sufficient supply of affordable homes,” Lawrence Yun, NAR’s chief economist, said in a statement. “The upper-end market is still moving sharply as inventory is more plentiful there.”
As people across the country continue to get vaccinated and become more acclimated to resuming more normal activities, Yun noted that more supply should come to market in upcoming months. In addition, he said the end to eviction and forbearance moratoria should also drive a new population of homeowners to sell.
In a reversal from March’s pending-home sales report, record-low inventory negatively impacted pending-home sales in all regions except the Midwest, which saw gains of 3.5 percent from the previous month to a PHSI of 101.1. In March, the PHSI rose in every region but the Midwest, which saw a decline of 3.7 percent that month.
“The Midwest region, which has the most affordable homes, was the only region to notch a gain in the latest month,” Yun said. “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.”
The Northeast PHSI dropped 12.9 percent from the previous month to 85.3, which was still up 96.5 percent year over year.
In the South, the PHSI declined 6.1 percent to 128.9, up 45.3 percent from the year before.
The PHSI in the West saw a more slight decline of 2.6 percent to 92. That figure was up 57.3 percent from April 2020.