Contract signings for home purchases rose for the third consecutive month, with upticks in the South and West regions of the country providing the bulk of the increase, according to the latest NAR’s latest Pending Home Sales Index.
Overall, the index climbed 5.1 percent month-over-month in April to a 116.3 reading. The index is now 4.6 percent higher than a year ago.
“The ability to sign a contract on a home is slightly exceeding expectations this spring even with the affordability stresses and inventory squeezes affecting buyers in a number of markets,” says Lawrence Yun, NAR’s chief economist. “The building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down the road appear to be bringing more interested buyers into the market.”
Mortgage rates have remained below 4 percent in 16 of the past 17 months, a boon to home buyers. Yun predicts that rates for home purchases will continue to hover around 4 percent in the coming months, but he cautions inflation could potentially cause rates to jump suddenly.
“Even if rates rise soon, sales have legs for further expansion this summer if housing supply increases enough to give buyers an adequate number of affordable choices during their search,” Yun says.
The Midwest was the only major region of the country to see contract activity slip in April, albeit slightly. Here’s a closer look at how pending home sales fared across the country last month:
- Northeast: pending home sales rose 1.2 percent to 98.2 in April, and are now 10.1 percent above a year ago.
- Midwest: pending home sales dropped slightly by 0.6 percent to 112.9 in April, but are still 2 percent above April 2015.
- South: pending home sales increased 6.8 percent to an index of 133.9 in April, and are 5.1 percent higher than last April.
- West: pending home sales rose 11.4 percent in April to 106.2, and are now 2.8 percent above a year ago.