Pending sales down, inventory shows slight increase
Higher mortgage rates, the continued lack of inventory, declining affordability, and inflation took a bite out of April’s pending sales.
Sellers accepted 897 new contracts last month, down from 917 in March and 21 more than April last year.
Pending sales are a leading indicator of housing activity based on signed contracts for existing single-family homes and condominium sales in the region monitored by the Northeast Tennessee Association of Realtors (NETAR). Since resales go under contract 30 to 60 days before they close, accepted contracts offer insight into the direction home sales will take.
“This month’s report affirms sales are slowing down, and pending sales would have been lower if there had been fewer cash sales,” NETAR President Rick Chantry said. “Cash sales continue playing a significant role in the local market. That means rising mortgage rates – or higher prices for that matter – didn’t have as much impact as expected.” Last month, there were 250 cash sales – 35% of all existing home sales reported by NETAR.
Both new listings and active inventory gained ground last month. There were 1,038 active listings in mid-May. “It was the first time in six months that active inventory was above 1,000 listings,” Chantry said. It’s an improvement, but inventory is still very tight. He added that at the current sales pace, there’s barely a month’s worth of inventory market. And the inventory picture isn’t any brighter in the city and submarkets. Ten of 15 local markets had less than a month’s inventory.
The typical home that sold in April was on the market for 42 days before it closed. That’s down four days from March and down 14 days from the beginning of the year. When homes spend less time on the market it signals demand is increasing.
NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region, representing over 1,800+ members and 100+ business partners involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members are available on the NETAR website at https://netar.us