US pending home sales drop by most since 2022 on mortgage rates

Michael Sasso, Bloomberg News on May 29, 2025

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Pending sales of previously owned U.S. homes last month fell by the most since September 2022, illustrating a disappointing spring selling season as prospective buyers balk at high asking prices and borrowing costs.

An index of contract signings dropped 6.3% in April to 71.3, according to National Association of Realtors data issued Thursday. The decline was steeper than all estimates in a Bloomberg survey of economists. Pending sales in the West also fell by the most in more than two and a half years.

The disappointing figures suggest the resale market will continue to trudge along until prices come off their record levels and mortgage rates settle somewhere closer to 6% than the current 7%. While more homeowners are listing their homes, others are waiting for cheaper financing options. Underscoring that, NAR Chief Economist Lawrence Yun said the market currently is “all about mortgage rates.”

“Despite an increase in housing inventory, we are not seeing higher home sales,” Yun said in a statement. “Lower mortgage rates are essential to bring home buyers back into the housing market.”

Pending sales in the South, the biggest home-selling region, fell 7.7%. Contract signings decreased 8.9% in the West and 5% in the Midwest.

Gains in contract signings in February and March were a bit of a head fake for the crucial spring season. Historically, a pickup in contract signings is followed by a rise in closings that typically occur a month or two later. However, that relationship “has loosened in recent months,” according to a Bloomberg Economics note last week.

The share of existing-home sales that were canceled in the three months through April rose to 7%, the highest since January 2024, Yun said last week on a call with reporters.

(With assistance from Chris Middleton.)