Pending home sales lift for 3rd month but what happens next?
Pending home sales in April, when mortgage rates averaged 6.44% vs 6.26% in March, rose by 1.4% m/o/m, just above the estimate of up 1% and after a 1.7% increase in March and a 2.5% rise in February after a few months of declines. About all of the gain was seen in the Northeast and Midwest while there was little change in the South and West.
The NAR said “Buyers are coming out with cautious optimism despite increasing economic uncertainty and a slight rise in mortgage rates.”
Still limited inventory in some markets remains an issue in keeping prices elevated. The NAR added, “Unless supply meaningfully increases, home price growth could outpace wage growth and further erode the homeownership rate. All efforts need to be focused on boosting housing supply.”
Bottom line, as seen in the chart below, the pace of transactions continues to bounce along the multi decade bottom for reasons we all know and now we have higher mortgage rates again coincident with the rise in the 10 yr Treasury yield.
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