A strong showing of homebuyers in the South and West boosted overall U.S. home sales in April. Signed contracts to buy existing homes rose 5.1 percent compared to March, hitting the highest level in a decade. The so-called "pending home sales index" from the National Association of Realtors is now up 4.6 percent from April of 2015.
"The ability to sign a contract on a home is slightly exceeding expectations this spring even with the affordability stresses and inventory squeezes affecting buyers in a number of markets," said Lawrence Yun, the National Association of Realtors' chief economist in a release. "The building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down the road appear to be bringing more interested buyers into the market."
Regionally, pending home sales in the Northeast climbed 1.2 percent for the month and are 10.1 percent above a year ago. In the Midwest, the index declined 0.6 percent for the month and is 2.0 percent above April 2015. Pending home sales in the South jumped 6.8 percent monthly and are 5.1 percent higher than last April. The index in the West rose 11.4 percent monthly and is now 2.8 percent above a year ago.
Closed sales of existing homes, which are based on contracts signed in February and March, rose 1.7 percent for the month and were up 6 percent from April of 2015. While sales are improved, they could be even stronger, were it not for the short supply of available homes on the market.
The inventory of existing homes for sale in April was 3.6 percent lower than a year ago. New listings are also slowing down, as potential sellers worry they won't be able to find something else to buy. New construction, while gaining steam, is still well below historical average levels.
Sales of newly built homes made a more dramatic jump in April, with signed contracts rising 16.6 percent for the month to the highest level in eight years, according to the U.S. Census.