April 21, 2026
Pending home sales rose 1. 5% in March to 73.7 after gaining 2.5% in February.
The National Association of Realtors chief economist, Lawrence Yun said, “Contract signings rose in March despite higher mortgage rates, pointing to pent-up housing demand. A greater supply of inventory will help translate that demand into more home sales.” He added that, “Demand sensitivity to mortgage rates is greatest among first-time buyers, particularly younger buyers. As a result, boosting supply and new-home construction should focus on smaller, more affordable homes.”
Current homeowners are still somewhat reluctant to put their homes on the market which would mean trading in their current 3.0-3.5% mortgage rate for a 6.5% rate. As a result, the supply of homes on the market for realtors to show their clients was very low for a long time It appears that the inventory of unsold homes has been gradually rising and we expect it to continue to climb throughout 2026.
We believe that a slower rate of inflation could allow the 30-year mortgage rate to decline slightly to 6.2% by the end of 2026. At the same time more current homeowners should be willing to put their houses on the market. As supply increases prices may decline somewhat. And with continuing job gains and rising wages, consumer income should continue to climb. These factors should boost housing affordability in the months ahead. By the end of this year we expect a median income earning family to have 20% more income than required to purchase a median priced home.. That should boost both existing and new home sales as we move into the summer.
We follow pending home sales because it is a fairly good indicator of existing home sales a month or two later. Pending home sales suggest that existing home sales should remain sluggish until later in the year.
This series on pending home sales is collected by the National Association of Realtors and represents contracts signed, but not yet closed, on existing home sales. Thus, it is both a leading indicator of existing home sales and housing market activity in general. Not all these contracts go to completion. The buyer may not qualify for a mortgage, the house may not appraise at a sufficiently high value, or the house may fail the buyer’s inspection. But the series is clearly indicative of changes in housing market activity.
Stephen Slifer
NumberNomics
Charleston, SC
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