Pending home sales increased by 1.4% in April compared to the previous month and rose 3.2% from a year earlier, according to a May 19 report from the National Association of Realtors.
The data is important for agents, buyers, and sellers because it provides an early indication of housing market activity and future completed transactions. The Pending Home Sales Index tracks signed contracts on existing homes that have not yet closed.
Regionally, pending home sales grew month over month in the Northeast (6.6%), Midwest (3.0%), and West (0.4%), but declined in the South by 0.7%. Year over year, increases were recorded in the Midwest (2.7%), South (4.7%), and West (3.8%), while the Northeast saw a decrease of 0.6%. Among major metropolitan areas, Boston-Cambridge-Newton led with a 10.3% annual increase in pending home sales.
NAR Chief Economist Dr. Lawrence Yun said, “Buyers are coming out with cautious optimism despite increasing economic uncertainty and a slight rise in mortgage rates.” Yun also said, “Demand will easily be even higher once mortgage rates retreat to the levels they were at earlier this year.” He added that “historically low foreclosure sales imply minimal price discounts, with a majority of markets selling at a higher price from a year ago.” Yun continued: “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.”
The Pending Home Sales Index is based on approximately 40% of multiple listing service data each month and serves as an early indicator for upcoming closed sales within one or two months after contract signing.
According to the official website, the National Association of Realtors functions as the leading trade association for real estate professionals across around 1,200 local boards and 54 state and territorial associations; it supports diversity and inclusion within its membership; delivers resources such as research, statistics, advocacy initiatives, education programs and news; works to empower members regarding property rights; maintains headquarters in Chicago with an additional office in Washington D.C.
The next Existing-Home Sales report is scheduled for June 9 while another Pending Home Sales Index update will be released June 17.
