Pending Home Sales (PHSI) Dip in April After Previous Rebound

The National Association of Realtors (NAR) said the Pending Home Sales Index (PHSI) dipped 1.5% to 104.3 in April, missing the consensus forecast after a rebound the previous month.

“Though the latest monthly figure shows a mild decline in contract signings, mortgage applications and consumer confidence have been steadily rising,” Lawrence Yun, NAR chief economist said. “It’s inevitable for sales to turn higher in a few months.”

The PHSI, a forward-looking indicator based on contract signings, had come in at 105.8 in March initially and was revised marginally higher to 105.9. Year-over-year contract signings fell 2.0% for the 16th straight month of annual decreases.

“Home price appreciation has been the strongest on the lower-end as inventory conditions have been consistently tight on homes priced under $250,000,” Mr. Yun added. “Price conditions are soft on the upper-end, especially in high tax states like Connecticut, New York and Illinois.”

The supply of inventory for homes priced under $250,000 came in at 3.3 months in April, and inventory for homes priced at $1 million or higher came in at 8.9 months.

The PHSI in the Northeast fell 1.8% to 88.9 and is now down 2.1% year-over-year. In the Midwest, the index rose 1.3% to 96.8 and is now 2.4% lower than it was in April 2018.

Pending home sales in the South were down 2.5% to an index of 124.0, or 1.8% lower than year-over-year. The index in the West fell 1.8% in April to 93.5 and is now down only 1.5% from a year ago.

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