Existing home sales in the United States rose less than expected last month, increasing 0.2% in April to a seasonally adjusted annual rate of 4.02 million units, the National Association of Realtors reported on Monday.
Reuters said that economists it polled had forecast home resales would rise to a rate of 4.05 million units.
Sales could struggle to gain any strength as mortgage rates remain elevated and rising inflation squeezes household budgets, the report indicated.
“Despite mixed macroeconomic signals, including a record-high stock market and historically low consumer confidence, home sales were modestly boosted by the continued improvement in housing affordability,” NAR Chief Economist Lawrence Yun said.
Yun added: “Inventory still remains tight. Multiple offers, though not as intense as a few years ago, are still occurring. At the same time, days on market are lengthening on average, implying that consumers are taking their time before making decisions.”
Sales Fell in March
NAR noted that the Existing-Home Sales data measures sales and prices of existing single-family homes for the nation overall, and breaks down data for the West, Midwest, South, and Northeast regions of the country. The figures include condos and co-ops, in addition to single-family homes.
Existing-home sales fell by 3.6% month-over-month in March, according to an earlier NAR Existing-Home Sales Report.
“March home sales remained sluggish and below last year’s pace,” Yun said when the March report was released.. “Lower consumer confidence and softer job growth continue to hold back buyers.”
Existing home sales are counted at the closing of a contract and April’s sales likely reflected contracts signed in February and March, according to Reuters.
Home sales increased in the South and Midwest regions and fell in the West. Sales were unchanged in the Northeast. Overall sales were flat compared to a year ago in April.
Analyst Notes a Slump
Bankrate Senior Economic Analyst Mark Hamrick said there is not much “spring” in the this year’s spring home sales.
“There’s still a slump in sales of previously owned homes, dampened by a lack of supply of homes for sale and constrained by affordability challenges. The spring home selling season has run into an Iran War oil slick with the pop in mortgage rates stemming from inflation pressures, weighing on sales. Mortgage rates have remained somewhat elevated after sinking to 6.09% for the 30-year fixed in mid-February, according to Bankrate’s weekly survey of lenders,” Hamrick noted.
He said that there has been some easing of affordability.
“If there’s good news here, it is that the dam appears to be cracking a bit on the housing affordability front. Growth in incomes is outpacing the national rise in home prices. With sales of previously owned homes flat from a year ago, and up modestly on the month, the housing market is essentially marching in place, in contrast to the rise in sales of generally lower-priced new homes. Even so, the National Association of Realtors says the national median home sales price rose to $417,700, a record for the month of April. That’s up less than 1% from a year earlier,” Hamrick said. “Also lending a hand on affordability, mortgage rates are down from a year ago. The Bankrate average for the 30-year fixed-rate mortgage stood at 6.43% in April, compared to 6.81% a year earlier. We aren’t back to the ‘old normal’ yet, but the path to homeownership is more accommodating than a year ago.”
Hamrick said that also is good new about inventory in the report.
“The 5.8% month over month jump in inventory is one of the headlines of this report. For some time, buyers have often been essentially fighting over scraps; now, with a 4.4-month supply, there’s more to choose from. The realtors trade group says much more inventory is needed to bring the housing market into better balance. Around the nation’s capital, for example, which has seen steep job cuts in the federal sector, the supply of homes for sale isn’t significantly changed,” Hamrick said.
South is Nation’s ‘Sales Engine’
“Real estate is local, and also regional to a degree. While the West is seeing some price softening that helps entry-level buyers, the South continues to be the nation’s home sales engine. The West region is the most expensive, with a $619,600 median sales price, down 1.4% from April last year. Compare that with the Midwest median sales price of $324,500,” Hamrick noted.
“While we do track the national data, but there isn’t really a single U.S. Housing Market, per se,” Hamrick noted. “There are thousands of neighborhood markets, each with their own characteristics. On an annual basis, sales are up in the South, flat in the West, and down in the Northeast and Midwest.”
