NAR: Pending Home Sales Increased 5.1% In April

Posted by Patrick Barnard on May 26, 2016 No Comments
Categories : Residential Mortgage

Pending home sales increased 5.1% in April compared with March to reach a score of 116.3 on the National Association of Realtors’ (NAR) Pending Home Sales Index.

What’s more, pending home sales were up 4.6% compared with April 2015.

It was the highest level since February 2006, NAR’s data shows.

As of April, the index had increased for 20 consecutive months on a year-over-year basis.

All major regions saw gains in contract activity in April except for the Midwest, which saw a meager decrease.

“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,” says Lawrence Yun, chief economist for NAR, in a statement. “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% in 16 of the past 17 months, Yun says it remains to be seen how long they will stay this low. He says he expects rates to continue to hover around 4% in coming months, but inflation could potentially surprise the market and cause rates to increase suddenly.

“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,” Yun says in the upbeat report.

Currently, Yun is forecasting that home sales this year will reach around 5.41 million, an increase of about 3% compared with 2015. He predicts home prices will increase between 4% and 5%.

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