US Markets
Wednesday, May 22nd, 2024 3:25 pm EDT
Key Points
- Decline in Home Sales and Rising Mortgage Rates: Sales of previously owned homes fell 1.9% in April from March and from April 2023, largely influenced by mortgage rates rising to around 7% since February.
- Inventory and Price Trends: Total housing inventory at the end of April was up 9% month-to-month and 16% year-over-year, with a notable increase in the supply of homes priced above $1 million. The median price of an existing home sold in April reached a record high of $407,600, up 5.7% year-over-year.
- Regional Sales and Buyer Dynamics: Regionally, sales declined in the Northeast, Midwest, and South but saw a slight year-over-year increase in the West. First-time buyers constituted 33% of April sales, a slight increase from the previous year, and the share of all-cash transactions remained high at 28%.
In April, sales of previously owned homes decreased by 1.9% from March, totaling 4.14 million units on a seasonally adjusted annualized basis, according to the National Association of Realtors. This decline contrasts with forecasts predicting a slight increase. Compared to April 2023, sales also dropped by 1.9%. These figures are based on contract closings likely signed in February and March, a period when mortgage rates spiked to around 7% and maintained that level for two months before rising further in April. Lawrence Yun, the chief economist for the Realtors, noted that the significant increase in mortgage rates since the pre-COVID era has created a new environment, with the “lock-in effect” limiting home sales.
At the end of April, the total housing inventory rose to 1.21 million units, marking a 9% increase from March and a 16% rise from the previous year. Despite this increase, the inventory still represents just a 3.5-month supply at the current sales pace, whereas a six-month supply is considered balanced. Notably, the supply of homes priced above $1 million surged by 34% year over year, making this segment the most active in the market. Conversely, sales of homes priced under $100,000 fell by 7.1% year over year, while sales of homes priced over $1 million increased by 40%.
The tight housing supply has kept prices elevated. The median price of an existing home sold in April reached a record high of $407,600, up 5.7% from the previous year. Due to strong demand, 27% of homes sold for above their list price. Yun remarked that the record-high prices are favorable for homeowners, but he anticipates the rate of price increases to moderate as more inventory becomes available.
First-time homebuyers showed a slight resurgence, accounting for 33% of April’s sales, up from 29% the previous year. The proportion of all-cash transactions remained relatively high at 28%.
Regionally, the Northeast experienced a 4% decline in sales from March and a 4% decrease from April 2023, with the median price rising 8.5% year over year to $458,500. In the Midwest, sales dropped by 1% both month-to-month and year-over-year, with the median price increasing by 6% to $303,600. The South saw a 1.6% month-to-month decrease in sales and a 3.1% decline from the previous year, while the median price rose 3.7% to $366,200. In the West, sales fell by 2.6% from March but rose by 1.3% from April 2023, with the median price increasing by 9.3% to $629,600.
An earlier version of the report misstated the year-over-year increase in the supply of homes priced above $1 million, which is correctly noted as 34%.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/05/22/april-existing-home-sales.html
