Both new and existing home sales dropped last month, surprising analysts who expected to see gains.
Existing sales fell by 1.9% in April to a seasonally adjusted annual rate of 4.14 million, according to the National Association of Realtors. They were down by the same percentage YOY.
Analysts had forecast an uptick, making this data a surprise.
The median existing sales price rose 5.7% YOY to $407,600, the tenth consecutive month of annual price gains and the highest price ever recorded for the month of April. That was good news for sellers.
“Home prices reaching a record high for the month of April is very good news for homeowners,” said NAR Chief Economist Lawrence Yun.
This was not good news for buyers, however, especially first-timers and those with low incomes.
Prices jumps should cool as more inventory becomes available. The inventory of unsold existing homes increased a generous 9% from the month prior to 1.21 million, the equivalent of 3.5 months’ supply at the current monthly sales pace. Annually, it jumped 16.3%.
Still, stock remains constrained compared to demand as sky-high rates keep homeowners locked into their current house.
“When we see these mortgage rates, which is a 300 basis point increase from pre-Covid pace, we are in a new territory as to how the lock-in effect will restrain home sales,” Yun added.
New construction sales also slowed, falling 4.7% from March and 7.7% YOY.
The median sales price of new houses sold in April 2024 was $433,500, while the average sales price was $505,700, according to data from the U.S. Census Bureau and the Department of Housing and Urban Development.
New homes actually sold at a rate similar to pre-pandemic levels. They tend to be more expensive and therefore don’t attract the same attention existing homes do.
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