U.S. pending home sales fall sequentially in April, likely to remain modest

U.S. pending home sales dropped in April. On a sequential basis, pending home sales fell 1.3 percent after two straight months of modest rises. None of the major regions saw gains in sales activity, implying a widespread deceleration in momentum. According to the press release, listings are going under contract in less than one month, which indicates to strong demand.

Meanwhile, supply continues to be weak, which, along with solid home price appreciation, is expected to make it increasingly difficult for prospective buyers to find an affordable deal. Thus, absent a rebound in investment levels, pending home sales are expected to stay modest at best, noted Barclays in a research report.

Pending home sales measure housing contract activity and are based on signed real estate contracts for existing single-family homes, condos and co-ops. They usually lead existing home sales by one month or two. Thus, existing home sales are expected to moderate in months ahead, added Barclays.

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