The numbers: A shortage of properties for sale and high mortgage rates have stalled contract signings on U.S. homes in April.
Sales remain unchanged from the previous month, according to the monthly index released Thursday by the National Association of Realtors (NAR).
The number didn’t meet Wall Street economists’ forecast, as they had expected pending home sales to rise 0.8% in April.
Aside from a limited number of for sale listings, the 30-year mortgage is back above 7%, both of which are making homeownership expensive for the typical home buyer.
The 30-year was averaging at 7.03% as of Thursday morning, according to Mortgage News Daily.
Pending home sales reflect transactions where the contract has been signed for an existing-home sale, but the sale has not yet closed. Economists view it as an indicator for the direction of existing-home sales in subsequent months.
Big picture: The housing market is facing a major crunch as there’s not many options for home buyers on top of rising interest rates and making mortgage payments more expensive for would-be buyers.
Unless rates fall enough to entice homeowners with ultra-low mortgage rates to sell, or there’s a sudden burst of inventory, the sector will likely see the crunch persist. Meanwhile, builders — one of the few players creating housing units — are pretty upbeat about their future.
What the realtors said: “Not all buying interests are being completed due to limited inventory,” NAR Chief Economist Lawrence Yun said. “Affordability challenges certainly remain and continue to hold back contract signings, but a sizeable increase in housing inventory will be critical to get more Americans moving.”