Sales of existing homes fell 1.9% in April as potential buyers rejected rising home prices and 7% mortgage rates. The National Association of Realtors (NAR) reports it was the second straight month that sales declined.
However, despite the decline in sales home prices continued to rise in April. The median existing-home sales price grew 5.7% from April 2023 to $407,600 – the tenth consecutive month of year-over-year price gains and the highest price ever for the month of April.
That doesn’t necessarily mean that all home prices increased that much. More likely, it means that fewer entry-level homes sold while buyers purchased more expensive properties.
"Home sales changed little overall, but the upper-end market is experiencing a sizable gain due to more supply coming onto the market," said NAR Chief Economist Lawrence Yun.
There was one bit of good news for buyers. Total housing inventory registered at the end of April was 1.21 million units, up 9% from March and 16.3% from one year ago.
Inventory levels are rising slightly
Unsold inventory sits at a 3.5-month supply at the current sales pace, up from 3.2 months in March and 3.0 months in April 2023. For homes priced $1 million or more, inventory and sales increased by 34% and 40%, respectively, from a year ago.
Another hopeful sign for buyers – mortgage rates dipped last week for a second straight week. The 30-year fixed-rate mortgage average 7.02%, down from 7.09% the previous week. However, a year ago the average rate was below 7%.
"Home prices reaching a record high for the month of April is very good news for homeowners," Yun said. "However, the pace of price increases should taper off since more housing inventory is becoming available."
