A gauge of U.S. pending home sales fell in April for a sixth straight month as a steep climb in mortgage rates compounds affordability challenges.
The National Association of Realtors’ index of pending home sales decreased 3.9% from a month earlier to 99.3, the longest such skid since 2018, according to data released Thursday. Economists in a Bloomberg survey called for a 2.1% drop, per the median forecast.
Mortgage rates are hovering near levels not seen since 2009, further straining buyers who are already grappling with record prices amid low inventory. Housing sales, including new-home purchases, are running at the slowest pace since the early months of the pandemic.
Federal Reserve officials, who are prepared to raise interest rates by another 50 basis points at each of their next two meetings, have said that tighter monetary policy will take some heat out of the housing market.
“Pending contracts are telling, as they better reflect the timelier impact from higher mortgage rates than do closings,” NAR’s chief economist Lawrence Yun said in a statement. “Home prices in the meantime appear in no danger of any meaningful decline.”
By region, contract signings fell in all regions but the Midwest.
Compared with a year earlier, contract signings were down by 11.5% on an unadjusted basis.
The pending home sales index is based on contract signings, rather than when a contract closes like existing-home sales. Previously owned home sales fell in April to the lowest since June 2020.