Amid High Mortgage Rates and Economic Uncertainty
According to new data from the National Association of Realtors (NAR), pending home sales across the United States fell sharply in April 2025, dropping 6.3% from the previous month. The decline was felt across all four major U.S. regions, with the Western market experiencing the steepest losses.
NAR’s Pending Home Sales Index (PHSI) — a forward-looking metric based on signed real estate contracts — dropped to 71.3 in April. That marks a 2.5% decline compared to the same period last year. For context, an index reading of 100 corresponds to the level of contract activity recorded in 2001.
Lawrence Yun
“At this critical stage of the housing market, it is all about mortgage rates,” said Lawrence Yun, chief economist at NAR. “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.”
Regional Sales Performance Mixed
Regionally, the West suffered the sharpest month-over-month decline, with pending sales falling 8.9% to an index of 53.3–down 6.5% compared to April 2024. The South followed with a 7.7% monthly drop, landing at 85.9, also down 3.0% year-over-year. In the Midwest, pending sales decreased 5.0% from March but rose 2.2% annually to 73.5. The Northeast saw the smallest monthly decline at 0.6%, bringing its index to 62.1, a 3.0% drop from the year prior.
Despite the nationwide slump, Yun pointed to the Midwest as a bright spot for affordability. “Home buyers have a better chance to purchase homes in affordable regions such as the Midwest, where the typical home price is $313,000 – 25% below the national median,” he noted. “Moreover, with housing inventory levels reaching five-year highs, home buyers in nearly every region of the country are in a better position to negotiate more favorable terms.”
The report underscores the ongoing challenge the U.S. housing market faces as buyers remain sensitive to fluctuating mortgage rates despite improving inventory levels.
