Pending home sales pummeled

The Midwest was the only region to post month-over-month gains

Pending home sales took a hit in April as the shortage of affordable housing remains a headwind for house hunters. 

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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.  

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"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. 

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"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. 

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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.