Signed contracts in April tumbled 5.4% YoY (NSA). This is the biggest drop in pending home sales since August 2014 and comes on the back of last week’s disappointing housing ‘recovery’ data as perhaps Fed- and Trump-driven mortgage-rate rises have finally hit the American ‘pocketbook’.
This is the second monthly drop in a row (-1.3% MoM) and comes with downward revisions for the last few months.
As Bloomberg notes, the back-to-back declines in contract signings were the first since May and June of last year and underscore how limited choices of properties are impinging on the market’s progress by boosting prices and creating affordability issues.
Ironically, NAR’s Larry Yun blames weak contract activity this spring on significantly weak supply levels spurring deteriorating affordability conditions.
“Much of the country for the second straight month saw a pullback in pending sales as the rate of new listings continues to lag the quicker pace of homes coming off the market,” he said.
“Realtors are indicating that foot traffic is higher than a year ago, but it’s obviously not translating to more sales.”
“Prospective buyers are feeling the double whammy this spring of inventory that’s down 9.0 percent from a year ago and price appreciation that’s much faster than any rise they’ve likely seen in their income.”
US housing data is at its worst since May 2016…
So what happens next?