Sunday, June 23, 2024

Existing home sales slipped in April, but prices hit a record high

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Sales of previously occupied U.S. homes fell for the second straight month in April as a stubbornly low supply of properties on the market and rising mortgage rates made the process of buying a house more difficult for many Americans.

According to the National Association of Realtors, existing home sales declined 1.9% from March to a seasonally adjusted annual rate of 4.14 million. That's slightly below the 4.22 million home sales pace of April 2023.

"Home sales changed little overall, but the upper-end market is experiencing a sizable gain due to more supply coming onto the market," said Lawrence Yun, NAR's chief economist. "Home prices reaching a record high for the month of April is very good news for homeowners. However, the pace of price increases should taper off since more housing inventory is becoming available."

The median existing home price for all housing types reached $407,600 in April, up a solid 5.7% from a year earlier. It was the tenth straight month of year-over-year price increases and the highest April price on records going back to 1999.

At the end of April, the inventory of unsold homes stood at 1.21 million homes for sale, up 9% from March and 16.3% from a year ago. At the current sales pace, that amounts to a 3.5-month supply, up from 3.2 months in March and 3.0 months in April 2023. While improving, the supply of homes for sale remains tight by historical standards.

"The housing market faces significant headwinds from high mortgage rates and low affordability," Yun added. "First-time buyers accounted for 33% of sales in April, consistent with recent months but well below their long-term average of around 40%."

Properties were on the market for an average of 26 days in April, down from 33 days in March but up from 22 days a year ago. Some 74% of homes sold last month were on the market for less than a month.

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