Existing home sales in April contracted 3.4% from the previous month to an annualized rate of 4.28 million, data from the National Association of Realtors released Thursday showed, as inventory challenges continue to weigh on transaction volume.
The annual rate fell below 4.30 million projected by economists, according to Bloomberg data, and down 23.2% from last year. The NAR data showed that the median sales price of an existing home also fell 1.7% from a year ago to $388,800.
NAR reports that one of the big factors affecting the market — the number of homes for sale — rose in April to 1.04 million units, up 7.2% from the March number and down just 1% from a year ago. But the seasonal increase is smaller than normal.
“It’s usually 10% between March and April,” NAR chief economist Lawrence Yoon said on a conference call with NAR. “We have a little more inventory this year than last year just because homes have been on the market a little bit longer.”
About 73% of homes sold in April have been on the market for less than a month. The stock was on the market for 22 days in April, up from 17 days a year ago. Unsold inventory was at 2.9 months of supply, or about half of the 6 month supply level which is considered a healthy market.
Regionally, sales in the Northeast fell 1.9% from the March number to an annualized rate of 510,000 in April, down 23.9% from April 2022 levels. The average price in the Northeast was $422,700, up 2.8% from a year earlier. .
In the Midwest, home sales It fell 1.9% from a month ago to an annualized rate of 1.02 million in April, down 21.5% from a year earlier. The median price in the Midwest was $287,300, up 1.8% from April 2022.
Sales in the South fell 3.4% in April from March to an annualized rate of 1.98 million, down 20.2% from a year earlier. since. The median price in the South was $357,900, down 0.6% from April 2022.
In the West, sales fell 6.1% from the previous month to an annualized rate of 770,000 in April, down 31.3% from a year earlier. The average price in the West was $578,200, down 8.0% from April 2022.
“Nearly half of the country is seeing price gains,” Yoon said in a press release. “Even in lower-priced markets, particularly in the expensive Western Region, multi-offer stands have returned in the spring buying season after the quieter winter market. Distressed and forced property sales are virtually non-existent.”
Made foreclosures and short sales Up 1% from sales in April, unchanged from the previous month and year. Individual investors or second home buyers, who make up much of cash sales, bought 17% of homes in April, unchanged from the level in March and a year earlier.
While a shortage of homes for sale hampers home buyers in the market, it has helped boost sentiment among single-family homebuilders, whose confidence is at a 10-month high. That’s because many buyers are flocking to the new home market.
More than a third of homes on the market in April were new construction, the National Association of Home Builders estimates, when that share is typically 13%.
This created an increased incentive for builders to develop more homes. For example, construction progressed in April, and reversed the decline in March, according to government data released on Wednesday. Both housing constructions and permits for single-family homes increased month by month.
The dearth of home inventory stems largely from the mortgage rate trap.
Right now, 83% of homeowners have mortgage rates under 5%, according to an analysis from Chief U.S. Chief Economist Mark Fleming, while the 30-year average mortgage rate has been stuck above 6% since mid-September.
“Why would anyone sell their house when it would cost so much more to borrow the same amount from the bank each month?” Fleming Books.
Danny Romero is a reporter at Yahoo Finance. Follow her on Twitter @tweet
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