In a new sign of a cooling market, the National Association of Realtors is reporting that pending homes sales across the country were off by nearly 4% in April from the month before.
Surveying sales based on contract signings, the association’s survey noted that such sales were down in all regions of the country, contributing to an overall drop of 9.1% compared to April of 2021.
“The latest contract signings mark six consecutive months of declines and are at the slowest pace in nearly a decade,” Lawrence Yun, chef economist with the NAR, said in a statement.
Yun added that “escalating mortgage rates have bumped up the cost of purchasing a home by more than 25%, while steeper home prices are adding another 15% to that figure.”
The Northeast has seen the biggest drop at 16.2% in pending home sales month to month, followed by the Midwest at 6.6%, and the South at 4.7%.
The decline was the smallest in the West, where pending sales were off by 4.3%.
Yun noted another potential downer on the market: “The vast majority of homeowners are enjoying huge wealth gains and are not under financial stress with their homes as a result of having locked into historically low interest rates, or because they are not carrying a mortgage.”
Because of such factors, continued the economist, potential homebuyers may increasingly opt for a 5-year adjustable-rate mortgage, or even look for home deals in other regions of the country.
By Garry Boulard
