US Pending Home Sales: April shows another drop - Wells Fargo

Analysts from Wells Fargo, point out that pending home sales in the US, dropped in April (-1.3%) for the second month in a row. According to them the decline is disturbing, but may have more to do with exceptionally lean inventories and the late Easter holiday.

Key Quotes: 

“Pending home sales, which lead existing home sales by 6 to 8 weeks, fell 1.3 percent in April following March’s downwardly revised 0.9 percent drop.”

“Signed contracts fell in each region except the West, which improved 5.8 percent from March’s 2.9 percent contraction. This marks the second consecutive monthly decline for the Midwest and Northeast, with the Midwest falling 4.7 percent. 

“The large declines in the Northeast and Midwest suggest seasonal factors exaggerated the recent slide in pending home sales. With sales stronger earlier, there was less of a bounce back this spring, which results in a decline after seasonal adjustment.”

“ Mortgage applications add a note of caution, however. Purchase applications fell 1.4 percent in late May and have declined for the past three weeks, despite lower mortgage rates.”