Pending home sales slipped in April as only the West managed to gain amid tight inventory nationwide.
The National Association of Realtors says that there was a 1.3% decrease in its Pending Home Sales Index to 109.8, down 3.3% from a year earlier. It was the largest year-over-year decrease since June 2014 (7.1%).
"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," said NAR chief economist Lawrence Yun.
He said that Realtors were reporting higher foot traffic but with inventory down 9% from a year ago, homes are selling fast and buyers are struggling with rising home prices outpacing increases in their income.
Existing home sales for the year is set to gain from 2016 despite the challenges, Yun forecasts. He is expecting a 3.5% increase to 5.64 million with the median price up 5%.
On inventory, he does not see much change in the situation any time soon. Homebuilding continues to lag demand and investors are not keen to offload their assets.
"To date, there are no indications investors are ready to sell. However, they should be mindful of the fact that rental demand will soften as the overall population of young adults starts to shrink in roughly five years," Yun said.
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