SILVER SPRING, Md. (AP) — Fewer Americans signed contracts to buy homes in April as a lack of supply continues to foil would-be buyers.
The National Association of Realtors’ index of pending home sales fell 4.4% to 106.2 in April, a third straight sluggish month after nearly a year-long rebound from the depths of the pandemic. The decline this month was much more than economists were expecting heading into the summer.
Contract signings, considered a barometer of purchases that will take place in the next two months, are more than 50% ahead of where they were last April, however, that was in the early stages of the coronavirus pandemic and virtually everything had been shut down. April’s decline could portend a weak summer in the housing market despite soaring prices and historically low interest rates entice buyers.
While many people are looking to upgrade, not as many people are willing to pack up and leave their current homes, resulting in a record-low number of houses on the market. That lack of inventory — along with sky-high costs for building materials like lumber — has pushed prices of new and existing homes to record highs.
Within the last week, separate reports showed that sales of both previously occupied homes and new homes both fell in April. Another report indicated that prices rose in March rose at the fastest pace in more than seven years.
The hyper-competitive market is especially hard on first-time homebuyers, who are accounting for fewer and fewer purchases.
Of the four major U.S. regions, only the Midwest — which has the most affordable houses — showed a gain in contract signings from the previous month.