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Pending home sales in April slump to lowest level since the start of the pandemic
U.S. Housing Market: Pending Home Sales Decline Sharply in April
Signed sales contracts on existing homes dropped 7.7% in April compared to March, marking the slowest pace since April 2020, according to the National Association of Realtors (NAR). These so-called pending sales are a forward-looking indicator of closed sales one to two months later. Pending sales were also 7.4% lower than in April of last year, highlighting a significant slowdown in the housing market.
Market Expectations and Mortgage Rates Impact
Sales were expected to be flat compared to March, but the reality reflected a different trend. Since the count is based on signed contracts, it shows how buyers are reacting to mortgage rates in real time. The average rate on the 30-year fixed mortgage ended March at around 6.9% and then surged, hitting 7.5% by the end of April, according to Mortgage News Daily.
With home prices still climbing and supply very low, leading to increased competition, that jump in rates had a huge effect on sales. “The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market,” said Lawrence Yun, chief economist for the NAR. “But the Federal Reserve’s anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply.”
Regional Disparities in Sales
Sales were down in every region of the country, but they fell hardest in the Midwest and West. The Midwest has some of the most affordable markets in the nation, while the West hosts some of the most expensive markets. This regional disparity indicates that even traditionally stable markets are experiencing the effects of rising interest rates and limited inventory.
Seller Reactions and Market Adjustments
In response to the slow sales pace in April, the share of sellers cutting prices in May hit 6.4%, the highest level since 2022, according to a new report from Redfin. The median asking price also dropped for the first time in six months, signaling a potential shift towards a more buyer-friendly market.
Active inventory in April was 30% higher than in April 2023, according to Realtor.com, suggesting that the summer market could be more active than last year. “Though inventory and prices are moving in a more buyer-friendly direction, lower mortgage rates will be crucial in bringing both buyers and sellers back into the market,” said Hannah Jones, senior economic research analyst with Realtor.com.
Future Market Conditions and Predictions
“The prospect of measurable home price declines appears minimal. The few markets experiencing price declines will be viewed as second-chance opportunities for buyers to enter the market if those regions continue to add jobs,” Yun added. This optimistic outlook hinges on the Federal Reserve’s anticipated rate cut, which is expected to improve affordability and increase supply, potentially stabilizing the market.
Broader Economic Context
This downturn in pending home sales comes amidst broader economic concerns, with consumers and businesses showing increased caution in spending. The Bank of America CEO noted that U.S. consumers and businesses have turned cautious on spending, reflecting a broader economic slowdown.
In addition, the Department of Education's ongoing issues with the FAFSA process and subsequent full-scale review have added to the economic uncertainty, affecting consumer confidence and spending power.
Impact on Buyers and Sellers
The rising mortgage rates and limited inventory have made it challenging for both buyers and sellers. Buyers are facing higher borrowing costs, while sellers are adjusting to a slower market pace by reducing asking prices and offering incentives. This dynamic has created a more competitive environment, particularly in regions with higher home prices.
Federal Reserve's Role
The Federal Reserve's actions will play a crucial role in shaping the housing market's future. An anticipated rate cut later this year could alleviate some of the pressure on mortgage rates, making home buying more affordable and encouraging more activity in the market. This move is expected to help balance supply and demand, leading to a more stable housing market.
Conclusion
The decline in pending home sales in April reflects the complex interplay of rising mortgage rates, limited inventory, and regional market conditions. As the market adjusts, the anticipated Federal Reserve rate cut later this year could play a crucial role in revitalizing home sales, improving affordability, and stabilizing the housing market. For now, both buyers and sellers are navigating a challenging landscape, with hopes pinned on better conditions in the near future.
The housing market's performance in the coming months will be closely watched, as it serves as a barometer for broader economic health. With careful monitoring and responsive policies, the market can achieve a more balanced state, benefiting both consumers and the economy at large.
#1 Free Windshield Replacement Service in Arizona and Florida!
Our services include free windshield replacements, door glass, sunroof and back glass replacements on any automotive vehicle. Our service includes mobile service, that way you can enjoy and relax at the comfort of home, work or your choice of address as soon as next day.
Schedule Appointment Now or Call (813) 951-2455 to schedule today.
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Miami, Orlando, Tampa, Jacksonville, Fort Lauderdale, Destin, Naples, Key West, Sarasota, Pensacola, West Palm Beach, St. Augustine, FT Myers, Clearwater, Daytona Beach, St. Petersburg, Gainesville, Kissimmee, Boca Raton, Ocala, Panama City, Panama City Beach, Miami Beach, Bradenton, Cape Coral, The Villages, Palm Beach, Siesta Key, Cocoa Beach, Marco Island, Vero Beach, Port St. Lucie, Pompano Beach, Florida City, Punta Gorda, Stuart, Crystal River, Palm Coast, Port Charlotte and more!
Areas Served in Arizona
Phoenix, Sedona, Scottsdale, Mesa, Flagstaff, Tempe, Grand Canyon Village, Yuma, Chandler, Glendale, Prescott, Surprise, Kingman, Peoria, Lake Havasu City, Arizona City, Goodyear, Buckeye, Casa Grande, Page, Sierra Vista, Queen Creek and more!
We work on every year, make and model including
Acura, Aston Martin, Audi, Bentley, BMW, Buick, Cadillac, Chevrolet, Chrysler, Dodge, Ferrari, Fiat, Ford, Freightliner, Geo, GM, GMC, Honda, Hyundai, Infinity, Jaguar, Jeep, Kia, Lamborghini, Land Rover, Lexus, Lincoln, Maserati, Mazda, McLaren, Mercedes Benz, Mercury, Mini Cooper, Mitsubishi, Nissan, Oldsmobile, Peugeot, Pontiac, Plymouth, Porsche, Ram, Saab, Saturn, Scion, Smart Car, Subaru, Suzuki, Tesla, Toyota, Volkswagen, Volvo and more!
All insurance companies are accepted including
Allstate, State Farm, Geico (Government Employees Insurance Company), Progressive, USAA (United Services Automobile Association), Liberty Mutual, Nationwide, Travelers, Farmers Insurance, American Family Insurance, AAA (American Automobile Association), AIG (American International Group), Zurich Insurance Group, AXA, The Hartford, Erie Insurance, Amica Mutual Insurance, Mercury Insurance, Esurance, MetLife Auto & Home, Safeway and many , many more!
States We Service
Front Windshield Replacement, Door Glass Replacement, Back Glass Replacement, Sun Roof Replacement, Quarter Panel Replacement, Windshield Repair
AutoGlass Services Provided
Front Windshield Replacement, Door Glass Replacement, Back Glass Replacement, Sun Roof Replacement, Quarter Panel Replacement, Windshield Repair
#1 Free Windshield Replacement Service in Arizona and Florida!
Our services include free windshield replacements, door glass, sunroof and back glass replacements on any automotive vehicle. Our service includes mobile service, that way you can enjoy and relax at the comfort of home, work or your choice of address as soon as next day.
Schedule Appointment Now or Call (813) 951-2455 to schedule today.
Areas Served in Florida
Miami, Orlando, Tampa, Jacksonville, Fort Lauderdale, Destin, Naples, Key West, Sarasota, Pensacola, West Palm Beach, St. Augustine, FT Myers, Clearwater, Daytona Beach, St. Petersburg, Gainesville, Kissimmee, Boca Raton, Ocala, Panama City, Panama City Beach, Miami Beach, Bradenton, Cape Coral, The Villages, Palm Beach, Siesta Key, Cocoa Beach, Marco Island, Vero Beach, Port St. Lucie, Pompano Beach, Florida City, Punta Gorda, Stuart, Crystal River, Palm Coast, Port Charlotte and more!
Areas Served in Arizona
Phoenix, Sedona, Scottsdale, Mesa, Flagstaff, Tempe, Grand Canyon Village, Yuma, Chandler, Glendale, Prescott, Surprise, Kingman, Peoria, Lake Havasu City, Arizona City, Goodyear, Buckeye, Casa Grande, Page, Sierra Vista, Queen Creek and more!
We work on every year, make and model including
Acura, Aston Martin, Audi, Bentley, BMW, Buick, Cadillac, Chevrolet, Chrysler, Dodge, Ferrari, Fiat, Ford, Freightliner, Geo, GM, GMC, Honda, Hyundai, Infinity, Jaguar, Jeep, Kia, Lamborghini, Land Rover, Lexus, Lincoln, Maserati, Mazda, McLaren, Mercedes Benz, Mercury, Mini Cooper, Mitsubishi, Nissan, Oldsmobile, Peugeot, Pontiac, Plymouth, Porsche, Ram, Saab, Saturn, Scion, Smart Car, Subaru, Suzuki, Tesla, Toyota, Volkswagen, Volvo and more!
All insurance companies are accepted including
Allstate, State Farm, Geico (Government Employees Insurance Company), Progressive, USAA (United Services Automobile Association), Liberty Mutual, Nationwide, Travelers, Farmers Insurance, American Family Insurance, AAA (American Automobile Association), AIG (American International Group), Zurich Insurance Group, AXA, The Hartford, Erie Insurance, Amica Mutual Insurance, Mercury Insurance, Esurance, MetLife Auto & Home, Safeway and many , many more!
States We Service
Front Windshield Replacement, Door Glass Replacement, Back Glass Replacement, Sun Roof Replacement, Quarter Panel Replacement, Windshield Repair
AutoGlass Services Provided
Front Windshield Replacement, Door Glass Replacement, Back Glass Replacement, Sun Roof Replacement, Quarter Panel Replacement, Windshield Repair
#1 Free Windshield Replacement Service in Arizona and Florida!
Our services include free windshield replacements, door glass, sunroof and back glass replacements on any automotive vehicle. Our service includes mobile service, that way you can enjoy and relax at the comfort of home, work or your choice of address as soon as next day.
Schedule Appointment Now or Call (813) 951-2455 to schedule today.
Areas Served in Florida
Miami, Orlando, Tampa, Jacksonville, Fort Lauderdale, Destin, Naples, Key West, Sarasota, Pensacola, West Palm Beach, St. Augustine, FT Myers, Clearwater, Daytona Beach, St. Petersburg, Gainesville, Kissimmee, Boca Raton, Ocala, Panama City, Panama City Beach, Miami Beach, Bradenton, Cape Coral, The Villages, Palm Beach, Siesta Key, Cocoa Beach, Marco Island, Vero Beach, Port St. Lucie, Pompano Beach, Florida City, Punta Gorda, Stuart, Crystal River, Palm Coast, Port Charlotte and more!
Areas Served in Arizona
Phoenix, Sedona, Scottsdale, Mesa, Flagstaff, Tempe, Grand Canyon Village, Yuma, Chandler, Glendale, Prescott, Surprise, Kingman, Peoria, Lake Havasu City, Arizona City, Goodyear, Buckeye, Casa Grande, Page, Sierra Vista, Queen Creek and more!
We work on every year, make and model including
Acura, Aston Martin, Audi, Bentley, BMW, Buick, Cadillac, Chevrolet, Chrysler, Dodge, Ferrari, Fiat, Ford, Freightliner, Geo, GM, GMC, Honda, Hyundai, Infinity, Jaguar, Jeep, Kia, Lamborghini, Land Rover, Lexus, Lincoln, Maserati, Mazda, McLaren, Mercedes Benz, Mercury, Mini Cooper, Mitsubishi, Nissan, Oldsmobile, Peugeot, Pontiac, Plymouth, Porsche, Ram, Saab, Saturn, Scion, Smart Car, Subaru, Suzuki, Tesla, Toyota, Volkswagen, Volvo and more!
All insurance companies are accepted including
Allstate, State Farm, Geico (Government Employees Insurance Company), Progressive, USAA (United Services Automobile Association), Liberty Mutual, Nationwide, Travelers, Farmers Insurance, American Family Insurance, AAA (American Automobile Association), AIG (American International Group), Zurich Insurance Group, AXA, The Hartford, Erie Insurance, Amica Mutual Insurance, Mercury Insurance, Esurance, MetLife Auto & Home, Safeway and many , many more!
States We Service
Front Windshield Replacement, Door Glass Replacement, Back Glass Replacement, Sun Roof Replacement, Quarter Panel Replacement, Windshield Repair
AutoGlass Services Provided
Front Windshield Replacement, Door Glass Replacement, Back Glass Replacement, Sun Roof Replacement, Quarter Panel Replacement, Windshield Repair
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Pending home sales in April slump to lowest level since the start of the pandemic
U.S. Housing Market: Pending Home Sales Decline Sharply in April
Signed sales contracts on existing homes dropped 7.7% in April compared to March, marking the slowest pace since April 2020, according to the National Association of Realtors (NAR). These so-called pending sales are a forward-looking indicator of closed sales one to two months later. Pending sales were also 7.4% lower than in April of last year, highlighting a significant slowdown in the housing market.
Market Expectations and Mortgage Rates Impact
Sales were expected to be flat compared to March, but the reality reflected a different trend. Since the count is based on signed contracts, it shows how buyers are reacting to mortgage rates in real time. The average rate on the 30-year fixed mortgage ended March at around 6.9% and then surged, hitting 7.5% by the end of April, according to Mortgage News Daily.
With home prices still climbing and supply very low, leading to increased competition, that jump in rates had a huge effect on sales. “The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market,” said Lawrence Yun, chief economist for the NAR. “But the Federal Reserve’s anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply.”
Regional Disparities in Sales
Sales were down in every region of the country, but they fell hardest in the Midwest and West. The Midwest has some of the most affordable markets in the nation, while the West hosts some of the most expensive markets. This regional disparity indicates that even traditionally stable markets are experiencing the effects of rising interest rates and limited inventory.
Seller Reactions and Market Adjustments
In response to the slow sales pace in April, the share of sellers cutting prices in May hit 6.4%, the highest level since 2022, according to a new report from Redfin. The median asking price also dropped for the first time in six months, signaling a potential shift towards a more buyer-friendly market.
Active inventory in April was 30% higher than in April 2023, according to Realtor.com, suggesting that the summer market could be more active than last year. “Though inventory and prices are moving in a more buyer-friendly direction, lower mortgage rates will be crucial in bringing both buyers and sellers back into the market,” said Hannah Jones, senior economic research analyst with Realtor.com.
Future Market Conditions and Predictions
“The prospect of measurable home price declines appears minimal. The few markets experiencing price declines will be viewed as second-chance opportunities for buyers to enter the market if those regions continue to add jobs,” Yun added. This optimistic outlook hinges on the Federal Reserve’s anticipated rate cut, which is expected to improve affordability and increase supply, potentially stabilizing the market.
Broader Economic Context
This downturn in pending home sales comes amidst broader economic concerns, with consumers and businesses showing increased caution in spending. The Bank of America CEO noted that U.S. consumers and businesses have turned cautious on spending, reflecting a broader economic slowdown.
In addition, the Department of Education's ongoing issues with the FAFSA process and subsequent full-scale review have added to the economic uncertainty, affecting consumer confidence and spending power.
Impact on Buyers and Sellers
The rising mortgage rates and limited inventory have made it challenging for both buyers and sellers. Buyers are facing higher borrowing costs, while sellers are adjusting to a slower market pace by reducing asking prices and offering incentives. This dynamic has created a more competitive environment, particularly in regions with higher home prices.
Federal Reserve's Role
The Federal Reserve's actions will play a crucial role in shaping the housing market's future. An anticipated rate cut later this year could alleviate some of the pressure on mortgage rates, making home buying more affordable and encouraging more activity in the market. This move is expected to help balance supply and demand, leading to a more stable housing market.
Conclusion
The decline in pending home sales in April reflects the complex interplay of rising mortgage rates, limited inventory, and regional market conditions. As the market adjusts, the anticipated Federal Reserve rate cut later this year could play a crucial role in revitalizing home sales, improving affordability, and stabilizing the housing market. For now, both buyers and sellers are navigating a challenging landscape, with hopes pinned on better conditions in the near future.
The housing market's performance in the coming months will be closely watched, as it serves as a barometer for broader economic health. With careful monitoring and responsive policies, the market can achieve a more balanced state, benefiting both consumers and the economy at large.