The Pending Home Sales Index decreased 1.3% in April for a second consecutive monthly decline, and fell 3.3% below its level a year ago. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), decreased to 109.8 in April, down from a revised 111.3 in March.
The PHSI decreased in the Northeast, South and Midwest by 1.7%, 2.7% and 4.7% respectively, while jumping 5.8% in the West. Year-over-year, the PHSI fell in all regions, ranging from 0.6% in the Northeast to 6.1% in the Midwest.
April existing sales fell 2.3%, and the drop in PHSI suggests the same for May. NAR cites as dual headwinds the spring inventory that is down 9.0% from a year ago, and price increases that continue to exceed wage increases. However, builder sentiment continues on an upward trend, and new home sales have increased in 2017. As the economy continues to add jobs, increased demand among first-time buyers will support new and existing sales in 2017.