The latest report from the National Association of Realtors (NAR) shows that pending home sales dropped by 7.7 percent in April. This decline is the steepest in three years and marks the lowest level since the start of the pandemic. Economists were expecting sales to remain unchanged from the previous month, making this decline a surprise.
What doesn’t come as a surprise is that high mortgage rates remain the primary factor keeping buyers on the sidelines, despite April sales increasing by more than 30 percent over the past year, according to Realtor.com. Nevertheless, some believe this is a strong indicator that we will see an active summer.
Realtor.com's latest monthly housing report reveals that the number of homes for sale in May has grown for seven consecutive months. Ralph McLaughlin, Senior Economist at Realtor.com, notes, "There are 35.2% more homes on the market than this time last year, an incredible trend in the direction of normality."
Economists have differing expectations regarding when the Federal Reserve will cut rates, with many predicting September as the most likely time frame. Lawrence Yun, NAR’s Chief Economist, believes the anticipated rate cut "should lead to better conditions, with improved affordability and more supply." However, lower mortgage rates are not guaranteed. Economists also differ on whether rates will be cut at all. Brown Harris Stevens Chief Economist Greg Heym remains skeptical.
As I always say, this is a "wait and see" industry. The housing market continues to experience significant shifts, and I recognize that these developments can be complex and may impact your buying or selling decisions. If you have any questions or concerns, please don't hesitate to reach out. I'm here to help you navigate this dynamic market and provide the insights you need to make informed decisions.
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