"Not enough homes are for sale to meet demand"
Existing-home sales fell for the second consecutive month in April.
Sales of previously owned homes declined 3.4% from March to a seasonally adjusted annual rate of 4.28 million in April, according to the National Association of Realtors. Year-over-year, sales plunged 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.”
As of May 11, the average 30-year fixed mortgage was 6.35%, down from 6.39% the week before but up from 5.30% a year ago.
Holden Lewis, home and mortgage expert at NerdWallet, pointed out that while home sales activity is cooling, home price growth remained stable due to the shortage in housing inventory, which sat at a 2.9-month supply in April. The median existing-home price for all housing types posted a slight annual decline of 1.7% to $388,800.
“Normally, you’d expect prices to take a nosedive, too, when few people are buying,” Lewis said. “But home prices declined less than 2% compared to a year earlier. The reason is that not enough homes are for sale to meet demand. There were 1.04 million homes on the market at the end of April. Compare that to the last April before COVID, in 2019, when 1.83 million homes were for sale.
“Homeowners are reluctant to sell their homes because they would have to give up the low mortgage rates they got when they refinanced in 2020 or 2021. So, they’re keeping their homes off the market — and buyers are finding themselves in competition with other buyers, which is why one-third of homes sold above list price in April.”
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