Pending home sales decreased to 68,000 contracts due to the Easter holiday, marking the first drop below 2024 levels in six weeks. Despite the spike in borrowing costs from tariff-induced U.S. Treasury yields in April, mortgage payments are now about 4% cheaper than last year. With inventory climbing and home prices stabilizing, the market is on track for modest growth in May after the temporary holiday lull. The broader market is expected to slowly normalize amid rising supply and stable pricing.
Buyers remain mortgage rate-sensitive, as April's tariff-fueled spike in U.S. Treasury yields pushed borrowing costs higher, but that's subsiding just a bit.
April's holiday purchase pause looks temporary. May should resume the very modest growth trend, as the broader market continues its slow march toward normalcy.
Home sales have finally been trending with a little growth. The big question is what's next, as potential homebuyers are sensitive to mortgage rate changes.
A typical mortgage payment is roughly 4% cheaper compared to last year, suggesting a shifting landscape for buyers.
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