Pending home sales fell 6.3 percent in April, according to the National Association of Realtors (NAR). Month-over-month, all four U.S. regions saw losses in transactions. Year-over-year, signings rose only in the Midwest, while the West suffered the greatest loss.

“At this critical stage of the housing market, it is all about mortgage rates,” NAR Chief Economist Lawrence Yun said. “Despite an increase in housing inventory, we are not seeing higher home sales. Lower mortgage rates are essential to bring home buyers back into the housing market.”

NAR’s Pending Home Sales Index (PHSI) dropped 6.3 percent to 71.3 in April. Year-over-year, pending transactions fell by 2.5 percent.

The Northeast PHSI decreased 0.6 percent from March to 62.1 and 3 percent year-over-year. The Midwest index fell 5 percent to 73.5 in April but was up 2.2 percent year-over-year.

In the South, PHSI sank 7.7 percent from March to 85.9 in April, down 3 percent year-over-year. The West index dropped 8.9 percent month-over-month to 53.3 and fell 6.5 percent from April 2024.

“Homebuyers have a better chance to purchase homes in affordable regions such as the Midwest, where the typical home price is $313,000 – 25 percent below the national median home price,” Yun said. “Moreover, with housing inventory levels reaching five-year highs, homeowners in nearly every region of the country are in a better position to negotiate more favorable terms.”