The number of pending home sales in April reached its lowest point since the beginning of the pandemic.

• Pending home sales in April fell to their slowest pace since April 2020.
• Despite being down in every region, sales dropped the most in the Midwest and West.
• The average rate on the 30-year fixed mortgage increased from 6.9% in March to 7.5% in April, as reported by Mortgage News Daily.

The National Association of Realtors reported that the number of signed sales contracts on existing homes decreased by 7.7% in April compared to March, marking the slowest pace since April 2020.

The number of pending sales in April 2021 was 7.4% lower than in April 2020.

Sales were expected to be flat compared with March.

The count of signed contracts indicates how buyers are responding to mortgage rates in real-time. The average rate on the 30-year fixed mortgage increased from around 6.9% in March to 7.5% by the end of April, according to Mortgage News Daily.

The surge in home prices, coupled with low supply, resulted in heightened competition and a significant impact on sales.

"Lawrence Yun, the chief economist for the NAR, stated that although there was more inventory in the market during April, the rising interest rates negatively affected home buying. However, he predicted that the anticipated rate cut by the Federal Reserve later this year would improve conditions, leading to increased affordability and more supply."

Despite being down in every region, sales fell the hardest in the Midwest and West, which are known for their contrasting market affordability and expense.

If job growth continues in regions experiencing home price declines, those markets will be viewed as second-chance opportunities for buyers to enter the market, according to Yun.

In May, the percentage of sellers cutting prices reached its highest level since 2022, at 6.4%, due to slow sales in April, according to a new report from Redfin. Additionally, the median asking price decreased for the first time in 6 months.

According to Realtor.com, the active inventory in April 2023 was 30% higher than in April 2022, indicating that the summer market could be more active than the previous year.

Lower mortgage rates will be crucial in bringing both buyers and sellers back into the market, despite inventory and prices moving in a more buyer-friendly direction, according to Hannah Jones, senior economic research analyst with Realtor.com.