Pending Home Sales Rise Again, but Mortgage Rates Keep Buyers Cautious
April contracts improved for a third straight month, but affordability, high rates and tight entry-level supply continue to weigh on housing.
WASHINGTON | U.S. pending home sales rose for a third straight month in April, but the housing market remains caught between buyers who are trying to re-enter the market and affordability pressures that continue to limit how far the recovery can run.
Reuters reported that the National Association of Realtors’ pending home sales index increased 1.4% in April to 74.8, beating economists’ expectations for a 1.0% gain. Pending sales are based on signed contracts and are often watched as a forward-looking indicator for existing home sales.
The improvement came after a temporary dip in mortgage rates gave some buyers room to move. But the broader picture remains difficult. Mortgage rates remain historically high compared with the low-rate period that shaped much of the pandemic-era market, and prices in many areas have stayed elevated because supply remains tight.
Regionally, Reuters reported that pending sales rose 6.6% in the Northeast, 3.0% in the Midwest and 0.4% in the West, while the South fell 0.7%. Year over year, pending sales were up 3.2% nationally.
The 30-year mortgage rate ended April at 6.30% and later rose to 6.36%, Reuters reported. That level can significantly change monthly payments for buyers, especially first-time buyers who do not have existing home equity to bring into a purchase.
The housing market is therefore showing activity without full relief. Buyers may move when rates dip, but builders, sellers and households remain constrained by financing costs, construction expenses, land availability, labor costs and limited entry-level inventory.
Additional Reporting By: Reuters; CGN News Staff
What this means
The April gain is encouraging but not decisive. It shows that demand exists when borrowing costs ease, but it does not erase the affordability problem facing buyers.
For households, the key number remains the monthly payment. Even modest rate changes can decide whether a home is reachable, delayed or out of range.