Dive Brief:
- Pending home sales rose 5.1% in April to a rate of 116.3, up from the upwardly revised rate of 110.7 in March, the National Association of Realtors reported Thursday.
- April's rate was 4.6 % higher than April 2015. Pending sales last month reached a 10-year high, climbing to their highest level since February 2006.
- Nearly all U.S. regions posted sales gains in April, with the exception of the Midwest — where sales slipped 0.6%. Pending sales rose in the West by 11.4%, in the South by 6.8%, and in the Northeast by 1.2%.
Dive Insight:
April pending home sales far surpassed expectations, as economists surveyed by The Wall Street Journal predicted only a slight 0.7% rise.
NAR Chief Economist Lawrence Yun said the strong job market and possibility of rising rents and mortgages is "building momentum" in the housing market. "Even if rates rise soon, sales have legs for further expansion this summer if housing supply increases enough to give buyers an adequate number of affordable choices during their search," he said in a release.
Yun repeated his call for homebuilders to accelerate construction of new properties, as tight supply has pushed up prices and forced some potential buyers out of the market. Builders, however, cite rising regulatory costs as a major obstacle to adding more inventory.
April marked an unexpectedly strong month for housing, reinforcing economist predictions that 2016 will be housing's "best year in a decade." Housing starts last month rose 6.6% to a 1.172 million annualized rate, existing home sales inched up 1.7%, and new home sales soared 16.6% to an eight-year high.
