Pending home sales rose for the third consecutive month in April and reached their highest level in over a decade, according to the National Association of Realtors®.
The Pending Home Sales Index, a forwardlooking indicator based on contract signings, has now increased year-over-year for 20 consecutive months.
Lawrence Yun, NAR chief economist, says, “The ability to sign a contract on a home is slightly exceeding expectations this spring even with the affordability stresses and inventory squeezes affecting buyers in a number of markets,” he said. “The building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down the road appear to be bringing more interested buyers into the market.”
On the topic of mortgage rates which have remained below 4 percent in 16 of the past 17 months Yun says it remains to be seen how long they will stay this low. For now, he foresees mortgage rates continuing to hover around 4 percent in coming months, but inflation could potentially surprise the market and cause rates to increase suddenly.
Adds Yun, “Even if rates rise soon, sales have legs for further expansion this summer if housing supply increases enough to give buyers an adequate number of affordable choices during their search.”
Following the housing market’s best first quarter of existing-sales since 2007 (5.66 million)2and a decent increase (1.7 percent) in April, Yun expects sales this year to climb above earlier estimates.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate.