Transaction side of housing market still on volatile ground

Lower mortgage rates helped home sales in March and higher ones did the exact opposite in April. Also throw in all the volatility of the stock market impacting buyer psychology. Pending home sales fell 6.3% m/o/m in April after rising by 5.5% in March and well below the estimate of down 1%.

The NAR 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.” I’ll add that price matters too as if lower mortgage rates bring ever higher home prices, the buyer is no better off. We thus need more housing supply more than we need lower mortgage rates I believe and it seems that we’re beginning to see that.