A gauge of home purchase contract signings slumped for a second month in April, another sign the housing market is still struggling for a balance between supply and demand.
The pending home sales index from the National Association of Realtors fell 1.3% to a level of 109.8 from a downwardly-revised March reading. The index was 3.3% lower than a year ago in April, marking the first yearly decline since December. Economists had forecast a 0.5% increase in April.
The index forecasts future sales by tracking real estate transactions in which a contract has been signed, but the deal has not yet closed.
Housing inventory is tightening and affordability declining, nudging contract activity down. Homes are coming off the market much more quickly than new listings are being added, NAR Chief Economist Lawrence Yun noted in a release.
The Realtors forecast 5.64 million previously-owned home sales in 2017, up 3.5% from 2016 and marking the best year for sales since the housing slump started in 2006.
In April, the pending-home sales index for the Northeast dipped 1.7%, and the index for the Midwest fell 4.7%. In the South, the index was down 2.7%. The West was the only region to notch an increase in April, with a 5.8% rise – although it’s still lower than a year ago.
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