The National Association of Realtors® (NAR) says its Pending Home Sales Index (PHSI) in April represents a sixth consecutive monthly decline. The Index, based on signed contracts to purchase existing homes, slid 3.9 percent from March to a 99.3 reading. Both new and existing home sales also experienced significant drops during the month. In October, the last time pending sales posted a gain, the index was at 125.1. The An index of 100 is equal to the level of contract activity in 2001. The PHSI has now been lower than during the same period a year earlier for 11 consecutive months. Last month’s index was 9.1 percent below the April 2021 level. [pendinghomesdata] “Pending contracts are telling, as they better reflect the timelier impact from higher mortgage rates than do closings,” said Lawrence Yun, NAR’s chief economist. “The latest contract signings mark six consecutive months of declines and are at the slowest pace in nearly a decade.” With mortgage rates rising, Yun forecasts existing-home sales to wane by 9 percent in 2022 and home price appreciation to moderate to 5 percent by year’s end. Yun added, “The escalating mortgage rates have bumped up the cost of purchasing a home by more than 25 percent from a year ago, while steeper home prices are adding another 15 percent to that figure.” The NAR report notes that the higher mortgage rates are increasing monthly payments on new mortgages by as much as $500 per month. Indeed, the Mortgage Bankers Association (MBA) reported Thursday morning that the national media mortgage payment, based on recent applications for loans, rose from $1,736 in March to $1,889 in April, an 8.8 percent increase. Yun notes that such price hikes are already a burden, but they become even more problematic to a family on a budget contending with rapid inflation , including surging fuel and food costs.

Published On: May 26, 2022 / Categories: Mortgage News /