Pending Homes Sales Index Drops -4.4% in April

The National Association of Realtors® (NAR) has reported their Pending Homes Sales Index (PHSI) — which is based on signed real estate contracts, not actual closings, for existing single-family homes, condos, and co-ops — declined -4.4% in April 2021 to a reading of 106.2. An index of 100 is equal to the level of contract activity in 2001. The PHSI has now declined three out of the past four months. Year-over-year contract signings jumped 51.7%. Pending home sales dropped month-over-month in all U.S. regions except for the Midwest. In a statement prepared for the release of the PHSI, NAR’s chief economist, Lawrence Yun said, “Contract signings are approaching pre-pandemic levels after the big surge due to the lack of sufficient supply of affordable homes. The upper-end market is still moving sharply as inventory is more plentiful there.” Yun anticipates housing supply to improve as a whole as soon as autumn. He points to an increase in the comfortability of those listing, as well as a rise in sellers after the conclusion of the eviction moratorium or as they exit forbearance.