Sales of previously owned homes fell 1.9% in April from March to 4.1 million units, on a seasonally adjusted annualized basis, according to the National Association of Realtors. The forecast had been for a slight gain.
Sales were also down from April 2023, off 1.9% from last year.
These sales are based on closings, so contracts likely signed in February and March. Mortgage rates jumped at the start of February and then held around 7% for the next two months before moving even higher in April.
“When we see these mortgage rates, which is a 300 basis point increase from pre-Covid pace, we are in a new territory as to how the lock-in effect will restrain home sales,� said Lawrence Yun, chief economist for the National Association of Realtors.
Total housing inventory at the end of April was 1.21 million units, up 9% month to month and up 16% from the year before, but still just a 3.5-month supply at the current sales pace. A six-month supply is considered balanced between buyer and seller. The supply of homes priced at more than $1 million, however, was up 34% year over year, which is why that segment of the market is most active.
Sales of homes priced below $100,000 fell 7.1% year over year, while sales of those priced over $1 million jumped 40%.
Tight supply kept prices under pressure. The median price of an existing home sold in April was $407,600, an increase of 5.7% year over year. That is another record high price for April. With multiple offers, due to strong demand, 27% of homes sold above list price.
“Home prices reaching a record high for the month of April is very good news for homeowners,� Yun said. “However, the pace of price increases should taper off since more housing inventory is becoming available.�
First-time buyers made a slight comeback, making up 33% of April sales, up from 29% the year before. The all-cash share was still relatively high, at 28% of all transactions.
Regionally, sales in the Northeast fell 4% from March and 4% from April 2023. The median price in the Northeast was $458,500, up 8.5% year over year.
In the Midwest, sales dropped 1% month to month and were also down 1% year over year. The median price in the Midwest was $303,600, up 6% from April 2023.
Sales in the South dropped 1.6% from March and 3.1% from the year before. The median price in the South was $366,200, up 3.7% from last year.
And in the West, sales were down 2.6% for the month and rose 1.3% from one year before. The median price in the West was $629,600, up 9.3% from April 2023.
