U.S. Pending Home Sales Index
Explore the NAR Pending Home Sales Index for the Austin area, featuring historical and current data on pending home sales trends. View the PDF for detailed insights into the Austin real estate market, sourced from the National Association of Realtors®
Pending Home Sales Index Falls Sharply: What the Latest National Data Reveals (May 2025)
The National Association of Realtors (NAR) has released its latest Pending Home Sales Index (PHS) as of May 30, 2025, and the numbers confirm what many in the housing industry have already observed—buyer activity remains well below historical norms. The index for April 2025 stands at 86.7, marking a sharp 29.3% decline from the long-term April average of 122.7. This level of contraction indicates a national market still struggling with affordability constraints, high inventory in many regions, and hesitant buyer sentiment.
When comparing performance from January through April 2025, the average index for those four months is down 25.3% from the historical average for the same period. This cumulative shortfall suggests that seasonal improvements in buyer activity failed to materialize at scale during the spring—a season typically marked by renewed momentum in housing markets. The steepest decline came in April, which historically carries strong weight as the second-highest month on average for pending sales behind March.
Year-over-year comparisons further support the trend of waning demand. April 2025’s index reading of 86.7 is down 3.5% from April 2024 (89.8) and down 22.3% from April 2023 (90.5). March fared slightly better, with a 0.7% decline from 2024 to 2025, but the consistency of negative annual trends across recent years confirms a broader, ongoing correction in the national housing market.
From a month-over-month perspective, the Pending Home Sales Index dipped 3.6% from March 2025 to April 2025, continuing the downward trajectory seen earlier in the year. This decline follows a modest 33.4% increase between February and March—a surge largely driven by seasonal expectations rather than sustained demand. That February-to-March bump was one of the few bright spots so far this year but proved short-lived as April numbers reversed the gains.
Zooming out, the broader trend shows that the U.S. housing market is experiencing one of its slowest periods for pending home sales in over a decade. April’s index reading of 86.7 is not only well below the historical average but also among the lowest April figures since the PHS began in 2001, excluding only the early pandemic months and the 2008 housing crisis. With six months left in the year, analysts will closely monitor whether the traditionally slower summer and fall months bring further declines or if pending sales can stabilize around these lower levels.
The sharp declines also reflect broader macroeconomic conditions. While mortgage rates have softened slightly in recent weeks, they remain high by historical standards, which continues to price out large segments of potential buyers. Additionally, inventory has risen in many markets, which, combined with fewer contracts being signed, underscores the prevailing imbalance between supply and demand.
The Pending Home Sales Index is a leading indicator of existing home sales, typically predicting trends one to two months in advance. As such, the sustained low levels in the PHS suggest that closed sales for May and June may underperform relative to typical seasonal benchmarks. Until affordability improves and confidence returns, the market is likely to remain subdued compared to the aggressive post-pandemic boom of 2020 and 2021.
Copyright ©2025“Pending Home Sales.” NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. Reprinted with permission. May 30, 2025. https://www.nar.realtor/research-and-statistics/housing-statistics/pending-home-sales
FAQ: National Housing Market Trends Based on the Pending Home Sales Index (May 2025)
What is the Pending Home Sales Index and why does it matter?
The Pending Home Sales Index (PHS), published by the National Association of Realtors, tracks the number of existing homes that are under contract but not yet closed. It serves as a leading indicator for future home sales activity. A high index means strong buyer activity, while a low index suggests weakening demand. The PHS is crucial because it provides early insight into the direction of the housing market one to two months ahead of official sales data.
How does April 2025 compare to past years in the Pending Home Sales Index?
April 2025 posted a PHS reading of 86.7, which is 29.3% below the long-term historical average for April (122.7). Compared to April 2024 and 2023, the index dropped 3.5% and 4.2%, respectively. This positions April 2025 as one of the weakest Aprils on record outside of the Great Recession and pandemic-induced slowdowns.
Why are pending home sales down in 2025?
Multiple factors contribute to the drop in pending home sales this year. High mortgage interest rates continue to reduce affordability, keeping many would-be buyers on the sidelines. Elevated home prices in many markets have not adjusted enough to entice buyers back, and economic uncertainty is impacting buyer confidence. These dynamics combine to create suppressed demand despite rising inventory in several regions.
How do pending sales from January to April 2025 compare to the average?
The first four months of 2025 show a Pending Home Sales Index that is 25.3% below the long-term average for the same period. Historically, this stretch includes the spring market—the most active time of the year for home buying—making the underperformance especially significant. It reflects a sluggish start to the year and highlights challenges in generating sustained buyer momentum.
What can we expect for the housing market for the rest of 2025?
If the Pending Home Sales Index is any indication, the remainder of 2025 may continue to see tepid buyer activity unless there is a meaningful drop in interest rates or a broader shift in affordability. Summer and fall typically bring lower sales volumes than spring, and with the PHS already near record lows, closed sales could remain below historical benchmarks. Inventory buildup could create opportunities for buyers, but market recovery will likely hinge on financial conditions improving for households.
