P
ending home sales took a hit in April, but lower prices and rising inventory may be luring buyers back into the market. Key statistics include:

    * Pending sales fell 6.3% from March to April and 2.5% year-over-year, according to the National Association of Realtors.

    * Mortgage rates rose for a third consecutive week, averaging 6.89%.

    * Purchase applications increased, however, as buyers gain negotiating power in some markets due to rising inventory.

    The economic news that dominated April's headlines likely contributed to the decline in pending home sales. The 30-year mortgage rate hovered around 7% throughout the month, and the April 2 tariff announcements and federal job cuts may have discouraged potential buyers from signing contracts.

    Mortgage rates remain a significant obstacle for would-be buyers, with many experts attributing the current market conditions to this factor. NAR Chief Economist Lawrence Yun emphasized that lower mortgage rates are essential to boost home sales, despite an increase in housing inventory.

    The prospect of privatizing Freddie Mac and Fannie Mae has also raised concerns about rising debt and potential higher mortgage rates for home shoppers. However, some experts believe that a privatized model could lead to more innovation in mortgage finance.

    Lower prices in certain metros may alleviate affordability woes, with 11 of the 50 largest metro areas experiencing price declines. Sellers are becoming more flexible, offering concessions and negotiating commissions to attract buyers.

    The rise in inventory is supporting transaction volume, despite economic uncertainty. New listings are up 3.9% compared to last year, while active listings have increased by 11.9%. However, the market remains competitive in some areas, with multiple interested buyers vying for each listing.