Existing-Home Sales Declined 2.4% in April, Prices Hit Record High
Washington, DC, May 19, 2022-Total existing-home sales slid 2.4% from March to a seasonally adjusted annual rate of 5.61 million in April, according to the National Association of Realtors. Year-over-year, sales dropped 5.9% (5.96 million in April 2021).
"Higher home prices and sharply higher mortgage rates have reduced buyer activity," said Lawrence Yun, NAR's chief economist. "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."
Total housing inventory at the end of April amounted to 1,030,000 units, up 10.8% from March and down 10.4% from one year ago (1.15 million). Unsold inventory sits at a 2.2-month supply at the current sales pace, up from 1.9 months in March and down from 2.3 months in April 2021.
"Housing supply has started to improve, albeit at an extremely sluggish pace," said Yun.
He also noted the rare state of the current marketplace.
"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," said Yun.
"Moreover, an increasing number of buyers with short tenure expectations could opt for five-year adjustable-rate mortgages, thereby assuring fixed payments over five years because of the rate reset," he added. "The cash buyers, not impacted by mortgage rate changes, remain elevated."
The median existing-home price for all housing types in April was $391,200, up 14.8% from April 2021 ($340,700), as prices increased in each region. This marks 122 consecutive months of year-over-year increases, the longest-running streak on record.
Properties typically remained on the market for 17 days in April, equal to both the number of days in March 2022 and in April 2021. Eighty-eight percent of homes sold in April 2022 were on the market for less than a month.
First-time buyers were responsible for 28% of sales in April, down from 30% in March and from 31% in April 2021. NAR's 2021 Profile of Home Buyers and Sellers-released in late 2021-reported that the annual share of first-time buyers was 34%.
According to the Wall Street Journal, “U.S. home prices climbed to a new record of $391,200 in April, but the number of sales fell as high prices and rising interest rates pushed more buyers out of the market.
“The U.S. housing market has started to slow after a two-year frenzy spurred by record-low mortgage interest rates and a desire for more space during the Covid-19 pandemic. Mortgage rates have climbed sharply in recent months, making home-buying less affordable.
“Existing-home sales fell 2.4% in April from the prior month to a seasonally adjusted annual rate of 5.61 million, the weakest rate since June 2020, the National Association of Realtors said Thursday. April sales fell 5.9% from a year earlier.
“Demand to buy homes continues to exceed supply, forcing buyers into bidding wars and pushing home prices higher.
“The median existing-home price rose 14.8% in April from a year earlier, with $391,200 a record high in data going back to 1999, NAR said.
“‘Higher home prices and sharply higher mortgage rates have reduced buyer activity,’ said Lawrence Yun, NAR’s chief economist. ‘We are moving back to pre-pandemic sales activity.’”