Sales of previously owned homes in the US declined for the second month in a row in April, marking the slowest April pace since 2009, as elevated mortgage rates and record prices continued to squeeze out potential buyers.
The National Association of Realtors (NAR) reported that existing home sales fell 0.5% from March to a seasonally adjusted annual rate of 4 million units.
Compared to April last year, sales were down 2%, and the figure fell short of economists’ expectations of 4.10 million units, according to FactSet.
April’s performance follows a persistent trend of sluggish activity in the US housing market . “The affordability condition is clearly hurting the market, particularly higher mortgage rates,” said Lawrence Yun, chief economist at NAR, as quoted by news agency AP.
Home sales have hovered at roughly 75% of pre-pandemic levels since 2022 when rates started rising from record lows.
Prices continue to rise, albeit more slowly. The median home price hit $414,000 last month, up 1.8% from April 2023, the highest for any April on record. This marked the 22nd consecutive month of annual price increases, though the gain was the smallest since July 2023.
The average rate on a 30-year mortgage climbed to 6.86% this week, up from 6.81% last week and nearing the year’s high of just over 7%, reported AP. These high borrowing costs are deterring many first-time buyers, even as inventory increases.
The number of unsold homes rose to 1.45 million in April, a 20.8% jump from the same month last year and the highest since September 2020. However, this remains below the 2 million homes typical before the pandemic.
Buyers who can navigate the tough market, either through savings or cash offers, are still active.
First-time buyers accounted for 34% of April’s sales, the highest since July 2020, while cash buyers made up 25% of transactions, down from 28% a year earlier. Investor purchases also dipped to 15% from 16%.
The increased supply means homes are sitting on the market longer. Properties typically spent 29 days on the market in April, up from 26 days a year earlier. The unsold inventory equates to a 4.4-month supply, up from 3.5 months in April 2023, but still shy of the 5 to 6 months seen as a balanced market.
Economists quoted by AP say mortgage rates are expected to remain volatile through 2024, likely staying within a 6% to 7% range. This instability, driven by Treasury yield movements and broader economic uncertainty, suggests homebuyers may continue facing affordability challenges during the year’s busiest buying season.
The National Association of Realtors (NAR) reported that existing home sales fell 0.5% from March to a seasonally adjusted annual rate of 4 million units.
Compared to April last year, sales were down 2%, and the figure fell short of economists’ expectations of 4.10 million units, according to FactSet.
April’s performance follows a persistent trend of sluggish activity in the US housing market . “The affordability condition is clearly hurting the market, particularly higher mortgage rates,” said Lawrence Yun, chief economist at NAR, as quoted by news agency AP.
Home sales have hovered at roughly 75% of pre-pandemic levels since 2022 when rates started rising from record lows.
Prices continue to rise, albeit more slowly. The median home price hit $414,000 last month, up 1.8% from April 2023, the highest for any April on record. This marked the 22nd consecutive month of annual price increases, though the gain was the smallest since July 2023.
The average rate on a 30-year mortgage climbed to 6.86% this week, up from 6.81% last week and nearing the year’s high of just over 7%, reported AP. These high borrowing costs are deterring many first-time buyers, even as inventory increases.
The number of unsold homes rose to 1.45 million in April, a 20.8% jump from the same month last year and the highest since September 2020. However, this remains below the 2 million homes typical before the pandemic.
Buyers who can navigate the tough market, either through savings or cash offers, are still active.
First-time buyers accounted for 34% of April’s sales, the highest since July 2020, while cash buyers made up 25% of transactions, down from 28% a year earlier. Investor purchases also dipped to 15% from 16%.
The increased supply means homes are sitting on the market longer. Properties typically spent 29 days on the market in April, up from 26 days a year earlier. The unsold inventory equates to a 4.4-month supply, up from 3.5 months in April 2023, but still shy of the 5 to 6 months seen as a balanced market.
Economists quoted by AP say mortgage rates are expected to remain volatile through 2024, likely staying within a 6% to 7% range. This instability, driven by Treasury yield movements and broader economic uncertainty, suggests homebuyers may continue facing affordability challenges during the year’s busiest buying season.
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