Existing-home sales fell for the third straight month in April as homebuyer purchasing power was hammered by higher home prices and a jump in interest rates, the National Association of REALTORS® said.
At the same time, total housing inventory rose 10.8% on a month-over-month basis to 1,030,000 units.
Total existing-home sales, which are completed transactions, including single-family homes, townhomes, condominiums and co-ops, slid 2.4% from March to a seasonally adjusted annual rate of 5.61 million in April. Year over year, sales volume was down 5.9% from 5.96 million transactions in April 2021.
“Higher home prices and sharply higher mortgage rates have reduced buyer activity,” NAR chief economist Lawrence Yun said in a press release. “It looks like more declines are imminent in the upcoming months, and we’ll likely return to the pre-pandemic home sales activity after the remarkable surge over the past two years.”
The median existing-home price for all housing types in April was $391,200, up 14.8% from a year before, as median prices rose in each region.
April’s unsold inventory represented a 2.2-month supply at the current sales pace, up from 1.9 months in the prior month and down from 2.3 months last year.
Properties typically remained on the market for 17 days in April, equal to the number of days in March as well as April 2021. Eighty-eight percent of homes sold in April were on the market for less than a month.
“The market is quite unusual, as sales are coming down, but listed homes are still selling swiftly, and home prices are much higher than a year ago,” NAR’s chief economist said. “”Moreover, an increasing number of buyers with short-tenure expectations could opt for 5-year adjustable-rate mortgages, thereby assuring fixed payments over five years because of the rate reset.”
By property type, single-family home sales in April slid to a seasonally adjusted annual rate of 4.99 million, down 2.5% from 5.12 million in the previous month and down 4.8% from a year earlier. The median existing single-family home price was $397,600, up 14.8% on a year-over-year basis.
Existing condominium and co-op sales came in at a seasonally adjusted annual rate of 620,000 units in April, down 1.6% from March and 13.9% compared to April 2021. The median existing condo price rose 13.1% year over year to $340,000.
In April, first-time buyers were responsible for 28% of sales, down from 30% in March and down from 31% in April 2021, while individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes, down from 18% in March and equal to 17% in April 2021.