Sales of previously owned homes fell 1.9% in April from March to 4.14 million units on a seasonally adjusted annual basis, according to the National Association of Realtors. Forecasts predicted a slight raise.
Sales were also down compared to April 2023, down 1.9% compared to last year.
These sales are based on closings, so contracts will likely be signed in February and March. Mortgage rates jumped in early February and then remained around 7% for the next two months before rising further in April.
“When we see mortgage rates raise 300 basis points from pre-pandemic rates, we are entering modern territory in terms of how the lockdown effect will reduce home sales,” said Lawrence Yun, chief economist at the brokerage real estate trade .
The total housing stock at the end of April was 1.21 million apartments, up 9% month-on-month and 16% more than a year earlier, but at the current sales rate, this is still only 3.5 months’ supply. The six-month supply is considered balanced between buyers and sellers. However, the supply of homes priced at more than $1 million increased by 34% year over year, which is why this segment of the market is the most busy.
Sales of homes priced under $100,000 fell 7.1% year-over-year, while sales of homes priced over $1 million increased 40%.
Tight supply kept prices under pressure. The average price of an existing home sold in April was $407,600, up 5.7% year-over-year. This is another record price in April. With multiple offers due to high demand, 27% of homes sold above list price.
“Home prices hitting record highs in April is very good news for homeowners,” Yun said. “However, the rate of price increases should sluggish as more housing stock becomes available.”
First-time shoppers saw a slight comeback, accounting for 33% of April sales, up from 29% a year earlier. The share of all-cash transactions was still relatively high and amounted to 28% of all transactions.
Regionally, sales in the Northeast were down 4% compared to March and 4% compared to April 2023. The average price in the Northeast was $458,500, an raise of 8.5% year-over-year.
In the Midwest, sales declined 1% month over month and 1% year over year. The median price in the Midwest was $303,600, up 6% from April 2023.
Sales in the south were down 1.6% compared to March and 3.1% compared to the previous year. The average price in the South was $366,200, up 3.7% from last year.
In the West, sales decreased by 2.6% in the month and increased by 1.3% compared to the previous year. The average price in the West was $629,600, an raise of 9.3% compared to April 2023.
Correction: The supply of homes priced at more than $1 million is up 34% year-over-year. An earlier version misstated the percentage.
