Existing-home sales fell 1.9% in April from March on a seasonally adjusted annualized basis to 4.14 million, according to the National Association of Realtors, beating expectations of a slight increase.
Sales also declined from April 2023, down 1.9% year-on-year.
These sales are based on closings, so contracts are likely to close in February and March. Mortgage rates spiked in early February, hovered around 7% for the next two months, and rose further in April.
“When you look at these mortgage rates, which are up 300 basis points from pre-COVID pace, we’re entering new territory in terms of how much the lock-in effect is going to suppress home sales,” said Lawrence Yun, chief economist at the Realtors Association.
Total home inventory at the end of April was 1.21 million, up 9% from the previous month and 16% from a year ago, but at the current sales pace, that’s only 3.5 months’ worth of inventory. Six months’ worth would be considered a good balance between buyers and sellers. However, the supply of homes priced at $1 million and above was up 34% from a year ago, which is why this segment of the market is the most active.
Sales of homes under $100,000 fell 7.1% year over year, while sales of homes over $1 million increased 40%.
Tight supply put pressure on prices. The median price of existing homes sold in April was $407,600, up 5.7% from the same month last year and also the highest price ever for April. Strong demand led to multiple offers, with 27% of homes selling for above list price.
“Home prices hitting an all-time high in April is very good news for homeowners,” Yoon said. “However, the pace of price growth should slow as more housing inventory is becoming available.”
First-time homebuyers made a slight comeback, accounting for 33% of sales in April, up from 29% a year ago, while all-cash buyers remained relatively high, accounting for 28% of all transactions.
By region, Northeast sales were down 4% from March and 4% from April 2023. The median price in the Northeast was $458,500, up 8.5% from a year ago.
In the Midwest, sales were down 1% month over month and down 1% year over year. The median price in the Midwest was $303,600, up 6% from April 2023.
Sales in the South were down 1.6% from March and 3.1% from a year ago. The median price in the South was $366,200, up 3.7% from a year ago.
And in the West, sales fell 2.6% for the month, up 1.3% year-over-year. The median price in the West was $629,600, up 9.3% from April 2023.
Correction: The supply of homes priced over $1 million increased 34% year over year. Previous versions had incorrect percentages.
