As pending home sales eased in April 2017, shortages may not be the only factor causing buyers to put on the brakes in home purchases. The budgets that buyers have to work with are probably stretched to the point that they can no longer justify spilling out so much, just to grab their slice of the American Dream pie.
This is reflected in the higher foot traffic from a year ago, which according to Redfin, the number of clients requesting home tours jumped 12% year-over-year.
The increase in sellers listing their homes in April from March 2017 was still less than the number of listings in 2016, which overall was 9% lower. The tight supply this time does not seem to ignite the increased number of buyers to pay much more except in certain areas that have access to public transportation to urban metropolitan areas.
The spring housing market continues to be plagued by a lack of homes for sale. Home shoppers signed 1.3 percent fewer contracts to buy existing homes in April compared with March, according to a monthly index from the National Association of Realtors. March’s reading was also revised down. The index is 3.3 percent lower than April of 2016.
According to the Mortgage Bankers Association, “Mortgage applications decreased 3.4 percent from one week earlier… (and) the Refinance Index decreased 6 percent from the previous week.”
Quick Stats
■ The refinance share of mortgage activity decreased to 43.2% of total applications from 43.9% the previous week.
■ The adjustable-rate mortgage (ARM) share of activity decreased to 7.7% of total applications.
■ The FHA share of total applications decreased to 10.5% from 10.8% the week prior.
■ The VA share of total applications increased to 10.8% from 10.5% the week prior.
■ The USDA share of total applications remained unchanged at 0.8% from the week prior.
It appears that the usual spring buying spree [Pending Home Sales – PHS] is taking a breather nationwide. Home buyers pulled back again in April, signing fewer contracts.
■ PHS in the Midwest, the fell 4.7% for the month of April
■ PHS in the Northeast decreased 1.7% for the month of April
■ PHS in the South sales fell 2.7% for the month of April
■ PHS in the West rose 5.8% in the month of April
According Lawrence Yun, chief economist for the Realtors, “Much of the country for the second straight month saw a pullback in pending sales as the rate of new listings continues to lag the quicker pace of homes coming off the market.”