After months—years, even—of historically low inventory, the tide has finally turned. More homes are hitting the market. Sellers are cautiously reemerging, hoping that spring’s momentum will carry through summer. And yet, the buyers we were all expecting? They’re hesitant. They’re watching. They’re waiting.
According To NAR’s latest forward-looking sales indicator shows contract signings fell 6.3% in April as buyers hold out for better conditions.
Home buyers are finding the highest number of homes for sale in years this spring, yet sales are falling short of expectations for what was expected to be a robust selling season. Economists say elevated mortgage rates are to blame.
“At this critical stage of the housing market, it is all about mortgage rates,” says Lawrence Yun, chief economist at the National Association of REALTORS®. “Despite an increase in housing inventory, we are not seeing higher home sales. Lower mortgage rates are essential to bring home buyers back into the housing market.”
Mortgage rates have remained stubbornly in the high 6% range, which may be giving some buyers cold feet in an atmosphere of still-rising home prices. NAR’s Pending Home Sales Index—a forward-looking indicator of home sales based on contract signings—fell 6.3% in April compared to March. Pending sales were down 2.5% year-over-year.
