According to the monthly index released by the National Association of Realtors (NAR) on Thursday, sales remained unchanged from the previous month.

The figure missed Wall Street economists' forecasts, as they had expected pending home sales to rise 0.8 per cent in April.

In addition to the limited number of homes for sale, 30-year mortgages are back above 7 per cent, both of which make home ownership expensive for the typical homebuyer.

As of Thursday morning, the 30-year averaged 7.03 per cent, according to Mortgage News Daily.

Pending home sales reflect transactions where contracts have been signed for the sale of existing homes, but the sale has not yet been completed. Economists view them as an indicator of the direction of existing home sales in subsequent months.

The Big Picture: The housing market is facing a major crunch as there are few options for homebuyers on top of rising interest rates, making mortgage payments more expensive for potential homebuyers.

Unless interest rates fall enough to entice homeowners with ultra-low mortgage rates to sell, or unless inventory suddenly explodes, the sector could see the crunch persist. Meanwhile, builders - one of the few players creating housing units - are feeling quite optimistic about their future.

What realtors are saying: "Not all buying interest has been met due to limited inventory," said NAR chief economist Lawrence Yun." Affordability challenges certainly remain and continue to impede contract signings, but the sizable increase in housing inventory is critical to getting more Americans to move."