10 West Hawaii Real Estate | June 8, 2018
Pending home sales lose steam in April, decline 1.3 percent
After two straight months of
modest increases, pending
home sales dipped in April
to their third-lowest level
over the past year, according to the
National Association of Realtors®. All
major regions saw no gain in contract
activity last month.
The pending home sales index, a
forward-looking indicator based on
contract signings, declined 1.3 percent
to 106.4 in April from an upwardly
revised 107.8 in March. With last
month’s decrease, the index is down
on an annualized basis (2.1 percent)
for the fourth straight month.
Lawrence Yun, NAR chief economist,
says the housing market this
spring is hindered because of the
severe housing shortages in much of
the country. “Pending sales slipped in
April and continued to stay within the
same narrow range with little signs
of breaking out,” he said. “Feedback
from Realtors®, as well as the underlying
sales data, reveal that the demand
for buying a home is very robust.
Listings are typically going under contract
in under a month, and instances
of multiple offers are increasingly
common and pushing prices higher.”
Added Yun, “The unfortunate reality
for many home shoppers is that reaching
the market will remain challenging
if supply stays at these dire levels.”
Heading into the summer months,
if low supply and swift price growth
were not enough of a headwind for
the housing market, Yun believes that
rising mortgage rates and gas prices
could lead to hesitation among some
would-be buyers.
“The combination of paying extra
at the pump, while also needing to
save more for a down payment because
of higher rates and home prices,
may weigh on the psyche of those
looking to buy,” he said. “For now, the
economy is very healthy, job growth is
holding steady and wages are slowly
rising. However, it all comes down
to overall supply. If more new and
existing homes are listed for sale, it
would allow home prices to moderate
enough to stave off inflationary pressures
and higher rates.”
Yun still forecasts for existinghome
sales in 2018 to increase 0.5
percent to 5.54 million – up from 5.51
million in 2017. The national median
existing-home price is expected to
increase around 5.1 percent. In 2017,
existing sales increased 1.1 percent
and prices rose 5.7 percent.
The PHSI in the Northeast remained
at 90.6 in April, and is 2.1
percent below a year ago. In the Midwest
the index decreased 3.2 percent
to 98.5 in April, and is 5.1 percent
lower than April 2017.
Pending home sales in the South
declined 1.0 percent to an index of
127.3 in April, but is still 2.7 percent
higher than last April. The index in
the West inched backward 0.4 percent
in April to 94.4, and is 4.6 percent
below a year ago.
The National Association of
Realtors® is America’s largest trade
association, representing 1.3 million
members involved in all aspects of
the residential and commercial real
estate industries.
“Feedback from Realtors®, as well as the underlying sales data, reveal that the
demand for buying a home is very robust. Listings are typically going under
contract in under a month, and instances of multiple offers are increasingly
common and pushing prices higher.” – Lawrence Yun, NAR Chief Economist
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