Brought on by the coronavirus pandemic, pending home sales decreased in April, making two straight months of declines, according to the National Association of Realtors®. Every major region experienced a drop in month-over-month contract activity and a decline in year-over-year pending home sales transactions.
The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, fell 21.8% to 69.0 in April. Year-over-year, contract signings shrank 33.8%. An index of 100 is equal to the level of contract activity in 2001.
The Northeast PHSI sank 48.2% to 42.6 in April, 52.6% lower than a year ago. In the Midwest, the index dropped 15.9% to 72.0 last month, down 26.0% from April 2019.
Pending home sales in the South fell 15.4% to an index of 87.6 in April, a 29.6% decrease from April 2019. The index in the West slipped 20.0% in April 2020 to 57.1, down 37.2% from a year ago.
This was below expectations for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in May and June.