Following a considerable drop last month, pending home sales fell for a second straight month in April, as economic and social activities were significantly reduced.
The Pending Home Sales Index (PHSI), reported by the National Association of Realtors (NAR), is a forward-looking indicator based on signed contracts. The PHSI plunged 21.8% from 88.2 in March to 69.0 in April, the lowest level since NAR began tracking the transactions in January 2001. On a year-over-year basis, sales were 33.8% lower than a year ago.
All four regions saw a decline in month-over-month contract activity, as well as in growth in year-over-year pending home sales transactions. The PHSI in the Northeast suffered the most, with 48.2% down from last month and 52.6% down from last year. However, compared to last month, rates of decline are lower in the Midwest, West and South.
Despite the significant decline in April, increased mortgage applications in recent weeks showed that housing demand has picked up. As mortgage rates have remained record low, NAR expected that buying activity would resume after government safely and cautiously reopens the economy.