Pending home sales pummeled
The Midwest was the only region to post month-over-month gains
Hot housing market 'sustainable' if cost of building capped: Industry expert
National Association of Home Builders CEO Jerry Howard notes that the housing supply shortage is driving increased prices for homes and argues it would be 'much less inflationary' if supply increases to about six months of houses on the market.
Pending home sales took a hit in April as the shortage of affordable housing remains a headwind for house hunters.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| XHB | SPDR® S&P® HOMEBUILDERS ETF - USD DIS | 119.94 | +2.03 | +1.72% |
The Pending Home Sales Index dropped 4.4% to a reading of 106.2 for the month as reported by the National Association of Realtors. However, contract signings jumped 51.7% year-over-year.
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"Contract signings are approaching pre-pandemic levels after the big surge due to the lack of sufficient supply of affordable homes," said Lawrence Yun, NAR’s chief economist.
All regions except the Midwest saw a month-over-month drop. In the Midwest, the index increased 3.5% to 101.1, up over 39% compared to the same period a year ago.
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"Some buyers from the expensive cities in the West and Northeast, who have the flexibility to move and work from anywhere, could be opting for a larger-sized home at a lower price in the Midwest" Yun explained.
Recent data points on housing are showing the red hot market is cooling. Mortgage applications fell 4.2%, according to the Mortgage Bankers Association's weekly survey. Interest in refinancing fell as well by 7% compared with the prior week.
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As of Thursday, the average rate for a 30-year fixed mortgage fell to 2.95%, down from last week when it averaged 3% as tracked by Freddie Mac.