Pending home sales took a hit in April as the shortage of affordable housing remains a headwind for house hunters.
|XHB||SPDR SERIES TRUST SPDR S&P HOMEBUILDERS ETF||70.13||-0.43||-0.61%|
The Pending Home Sales Index dropped 4.4% to a reading of 106.2 for the month as reported by the National Association of Realtors. However, contract signings jumped 51.7% year-over-year.
"Contract signings are approaching pre-pandemic levels after the big surge due to the lack of sufficient supply of affordable homes," said Lawrence Yun, NAR’s chief economist.
All regions except the Midwest saw a month-over-month drop. In the Midwest, the index increased 3.5% to 101.1, up over 39% compared to the same period a year ago.
"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" Yun explained.
Recent data points on housing are showing the red hot market is cooling. Mortgage applications fell 4.2%, according to the Mortgage Bankers Association's weekly survey. Interest in refinancing fell as well by 7% compared with the prior week.
As of Thursday, the average rate for a 30-year fixed mortgage fell to 2.95%, down from last week when it averaged 3% as tracked by Freddie Mac.