Pending home sales are at their lowest level in four years going into Spring of 2024, the worst levels since the height of COVID-19. The news for the usual spring home buying season is looking like a slump as buyers are avoiding high housing prices and are turned off by 7% mortgage rates under President Joe Biden's economy.
According to an Axios report on housing data collected from the National Association of Realtors (NAR), data shows this is the second-worst drop in home purchases since the agency started collecting data in 2001.
Would-be buyers in the market are facing ever-decreasing supply, shifting housing prices up, as well as mortgage rates that have been stuck at around seven percent. Additionally, homeowners are wanting to hold onto their mortgage rates that have been set at lower levels prior to the rate increases.
The NAR data shows that pending home sales decreased by 7.7 percent in April, with the midwest experiencing the steepest monthly declines, at 9.5 percent. Per Realtor.com, economists were expecting to see only a 0.4 percent drop in pending home sales during April this year.
Lawrence Yun, chief economist at the NAR said in a statement, “The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market.”
Yun added that if the Federal Reserve cuts the interest rates, that will lead to better conditions for buyers in the market. Although, it is unclear when the Fed will start to draw back on the interest rates due to persistent inflation.
The report comes as polls indicate that many Americans list the economy as a top concern, which has been in an inflationary cycle for years under President Joe Biden. Polls also indicate that voters prefer Trump over Biden when it comes to handling the economy.
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