Pending home sales climbed in April, the third straight month of rising sales.
The number of homes going under contract for sale rose 1.4 percent compared with the previous month, surpassing economist forecasts for a one percent gain. Sales are up 3.2percent year over year, according to the National Association of Realtors. The better-than-expected result signals measured buyer demand despite economic uncertainty and rising mortgage rates.
The increase reflects contracted sales that will typically close 30 to 45 days later, providing a forward-looking indicator of the broader housing market. Regional performance was uneven: the Northeast led with a 6.6 percent monthly gain, the Midwest posted a 3.0 percent increase, and the West edged up just 0.4 percent. The South contracted 0.7 percent month over month.
“Buyers are coming out with cautious optimism despite increasing economic uncertainty and a slight rise in mortgage rates,” said NAR Chief Economist Lawrence Yun in a statement. “Demand will easily be even higher once mortgage rates retreat to the levels they were at earlier this year.”
The regional picture shows sharp disparities. On a year-over-year basis, pending sales rose in the Midwest, South, and West, but fell in the Northeast. The Northeast’s strong month-over-month showing masks underlying year-over-year weakness, suggesting a temporary bounce rather than sustained momentum.
More tellingly, the West’s near-flatline monthly gain of just 0.4 percent reflects tepid activity despite year-over-year increases. The divergence reflects varying supply-demand dynamics across regions and suggests that mortgage rate sensitivity may be unevenly distributed across the country, with the South’s monthly contraction signaling particular weakness in what has historically been a growth driver for the housing market.
Yun highlighted a structural constraint that could limit downside risk to prices: historically low foreclosure sales. The scarcity of distressed inventory means that homes are selling at premiums to discounted levels, with a majority of markets posting year-over-year price appreciation.
“Unless supply meaningfully increases, home price growth could outpace wage growth and further erode the homeownership rate,” Yun said. “All efforts need to be focused on boosting housing supply.”
The warning underscores a persistent imbalance in the housing market—even as buyer sentiment shows resilience, constrained supply threatens to price out potential homeowners and compress affordability across the board. The low volume of foreclosure sales, however, signals a household sector not straining under the recent revival of inflationary pressures.
The pending home sales index measures the level of homes under contract, offering agents, homebuyers, and sellers a window into near-term transaction activity before closings are recorded.
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