The Pending Home Sales Index decreased 1.3% in April, and remains 2.1% below the level one year ago, having declined on an annualized basis for the fourth straight month. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR). The PHSI decreased to 106.4 in April from an upwardly revised 107.8 in March.
The PHSI remained unchanged in the Northeast, but declined 0.4% in the West, 1.0% in the South and 3.2% in the Midwest. Year-over-year, the PHSI increased 2.7% in the South, but declined by 4.6% in the West, 5.1% in the Midwest and 7.0% in the Northeast.
Existing sales fell last month, and the combination of a tight inventory, rising mortgage rates and higher prices suggest more of the same this spring. New home sales also declined last month. However, first quarter economic growth was confirmed, and the increase in home prices slowed in March. The expanding economy and healthy job market continue to generate demand, and builder confidence climbed higher in May, suggesting continued growth in new residential construction.