Pending home sales in the U.S. decreased for the fifth straight month in March, according to a report released by the National Association of Realtors on Wednesday.
NAR said its pending home sales slumped by 1.2 percent to 103.7 in March after plunging by 4.0 percent to a revised 105.0 in February. Economists had expected pending home sales to tumble by 1.6 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
"The falling contract signings are implying that multiple offers will soon dissipate and be replaced by much calmer and normalized market conditions," said Lawrence Yun, NAR's chief economist.
He added, "As it stands, the sudden large gains in mortgage rates have reduced the pool of eligible homebuyers, and that has consequently lowered buying activity."
The continued decrease in pending home sales came as pending home sales in the Midwest plummeted by 6.1 percent.
Pending home sales in the South also fell by 0.9 percent and pending sales in the West edged down by 0.2 percent, while pending sales in the Northeast spiked by 4.0 percent.
"Overall existing-home sales this year look to be down 9% from the heated pace of last year," said Yun. "Home prices are in no danger of decline on a nationwide basis, but the price gains will steadily decelerate such that the median home price in 2022 will likely be up 8% from last year."
