US April pending home sales -4.4% m/m vs +0.5% expected

April US pending home sales data

US April pending home sales

The y/y number is skewed by the April 2020 comp, which was ultra-depressed by the pandemic.

I don’t think this is an sign of any kind of slowdown in demand. When you look at inventories of homes for sale, they’re insanely low. People can’t find houses to buy and haven’t yet adjusted to the higher prices. I think that it will take some time for the new benchmarks to set in and it will take even longer to get supply of new houses on the market. There’s a multi-year tailwind here and a 30-year fixed is at 3.00%.

From the release:

“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. “The upper-end market is still moving sharply as inventory is more plentiful there.”

Yun anticipates housing supply to improve as a whole as soon as autumn. He points to an increase in the comfortability of those listing, as well as a rise in sellers after the conclusion of the eviction moratorium or as they exit forbearance.

“The Midwest region, which has the most affordable homes, was the only region to notch a gain in the latest month,” Yun noted. “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.”

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