Good news for wary homeseekers: the average existing home median sales price in April has fallen 1.7% year-over-year to $388,800 (when it stood at $395,500). In addition, the share of unsold existing homes increased 7.2% from March to 1.04 million by the end of the month, equivalent to 2.9 months of inventory supply.
This information comes to us by way of the National Association of Realtors Existing-Home Sales Report, which overall found that existing homes, which includes single-family homes, townhomes, condos, and co-ops, fell 3.4% from March to a seasonally adjusted annual rate of 4.28 million units. Year-over-year, sales slumped 23.2% (down from 5.57 million in April 2022).
“Home sales are bouncing back and forth but remain above recent cyclical lows,” said NAR Chief Economist Lawrence Yun. “The combination of job gains, limited inventory and fluctuating mortgage rates over the last several months have created an environment of push-pull housing demand.”
“Roughly half of the country is experiencing price gains,” Yun noted. “Even in markets with lower prices, primarily the expensive West region, multiple-offer situations have returned in the spring buying season following the calmer winter market. Distressed and forced property sales are virtually nonexistent.”
Typically, properties remained on the market for 22 days in April, down from 29 days in March, but up from 17 days in April 2022. Seventy-three percent of homes sold in April were on the market for less than a month.
First-time buyers accounted for 29% of sales in April, up from 28% in March. The lowest number of first-time buyers was in November 2022 when it stood at 26%.
All-cash sales accounted for 28% of transactions in April, up from 27% in March and 26% year-over-year.
Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in April, identical to March and one year ago.
Distressed sales5 – foreclosures and short sales – represented 1% of sales in April, unchanged from last month and the prior year.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.35% as of May 11. That’s down from 6.39% the previous week but up from 5.30% one year ago.
Single-family home sales slipped to a seasonally adjusted annual rate of 3.85 million in April, down 3.5% from 3.99 million in March and 22.4% year-over-year. The median existing single-family home price was $393,300 in April, down 2.1% year-over-year.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 430,000 units in April, down 2.3% from March and 29.5% year-over-year. The median existing condo price was $348,000 in April, an annual increase of 0.7%.
Existing-home sales in the Northeast receded 1.9% to an annual rate of 510,000 units (down 23.9% year-over-year), while the median price in the area was $422,700 (up 2.8% year-over-year).
The Midwest saw sales decline by 1.9% from last month and 21.5% year-over-year to an annual rate of 1.02 million units. The median price in the Midwest was $287,300, up 1.8% from April 2022.
In the South, sales decreased 3.4% to 1.98 million units sold, a decline of 20.2% year-over-year. The median price in the South was $357,900, down 0.6% from April 2022.
And finally, in the West, sales fell 6.1% from March and 31.3% year-over-year to a rate of 770,000 units. The median price in the West was $578,200, down 8.0% from April 2022.
Realtor.com Chief Economist Danielle Hale had this to say about the report:
“Sales of existing homes fell 3.4% in April to a pace of 4.28 million as buyers struggled to find homes that were a good fit for their needs and their budgets. After an upswing in February, mortgage rates eased in March, when many of the offers for homes sold in April would have been submitted,” Hale said. “Nevertheless, average mortgage rates in March were about 25 basis points higher than in February, providing a modest additional headwind for buyers navigating still-high home prices. The pace of home sales continues to exceed the 4 million sales low reached in January, and still lags year ago sales by a considerable 23.2%, roughly in line with annual declines in the prior two months.”
“Home sales dipped in all four regions, falling the most in the West, where high sales prices hamper affordability,” Hale continued. “Nationwide, home prices dipped 1.7% to a median of $388,800, driven by a notable 8.0% drop in the West and a more modest 0.6% decline in the South. Median home sales prices in the Northeast (2.8%) and Midwest (1.8%) actually climbed higher. This regional performance mirrors trends in the rental market, which saw the biggest rent growth in the Midwest and more moderate growth, and even declines, in some Western and Southern markets.”
“As buyers navigate housing affordability, a dip in home down payments suggests two things: 1) it’s getting harder for buyers to keep up with costs, and 2) a less competitive housing market is opening up opportunities for buyers who are making somewhat smaller down payments. As is the case for many housing indicators, however, the point of comparison is important. Down payments are still considerably larger than was common before 2020.”
“The real estate market is a glass half-full, half-empty story for first-time home buyers. A drop in market competitiveness and easing down payments open the door a bit wider, but the hurdles to entry are still quite high for first-timers who don’t have existing home equity to leverage for a downpayment,” Hale concluded. “Data show that on balance the optimistic factors pushed first-time homebuyer share up to 28% in April from 27% in March and 26% one year ago – one bright spot amid the market’s challenges. Fortunately, there are a number of assistance programs available to help buyers cobble together a down payment, and buyers can search to find programs in their area using this tool at Realtor.com.”
Bright MLS Chief Economist Dr. Lisa Sturtevant’s thoughts on the Existing-Home Sales report included:
“The spring housing market continues to be anything but typical, as home sales fell again in April. According to data released today by the National Association of Realtors, sales of existing homes fell to a seasonally adjusted rate of 4.28 million, down 3.4% from March and the second month in a row of declining home sales.”
“This spring, market activity is being constrained by elevated mortgage rates, which have pushed some buyers out of the market and have made others sit on the sidelines to wait for rates to fall. Uncertainty in the economy—from bank failures to debt limit debates—has also shaken consumers’ confidence. As individuals and families feel less certain about the economy, they tend to pull back from big decisions, like buying a home. A lack of inventory is also a major factor driving fewer sales.”
“Despite a cooler-than-normal spring market, we shouldn’t be concerned that the housing market is poised for a major correction. NAR is reporting that the national median home price fell 1.7% from a year ago, the third month in a row of year-over-year declines. However, that change in the median price does not indicate that prices across all local markets and all product types are lower. The recent dip in the overall U.S. median home price likely also reflects a change in the mix of homes sold, as rate-sensitive home shoppers shift to different home types and price points as they navigate the housing market this spring.”
