Sales of previously occupied U.S. homes were essentially flat in April, another lackluster showing for the housing market during what’s traditionally its busiest time of the year.
Existing home sales edged up 0.2% last month from March to a seasonally adjusted annual rate of 4.02 million units, the National Association of Realtors said Monday. Sales were unchanged compared to April last year.
The latest sales figure fell short of the roughly 4.12 million pace economists were expecting, according to FactSet.
Sales have been hovering close to a 4-million annual pace now going back to 2023, far short of the historic norm that is closer to 5.2-million.
And home prices continued to rise nationally last month, albeit at a slower rate. The U.S. median sales price increased 0.9% in April from a year earlier to $417,700, an all-time high for any April on data going back to 1999, NAR said. Home prices have risen on an annual basis for 34 months in a row.
The U.S. housing market has been in a slump since 2022, when mortgage rates began to climb from pandemic-era lows. Sales of previously occupied U.S. homes were essentially flat last year, stuck at a 30-year low. They have remained sluggish so far this year, declining from a year earlier through the first three months of this year.
“This spring homebuying season, so far all the way through April, we can say we are not predicting any increase compared to one year ago,” said Lawrence Yun, NAR’s chief economist.
While average incomes are now rising at a faster pace than U.S. home prices, affordability remains a major hurdle for aspiring homeowners.
Years of soaring home prices, especially in the early part of this decade when rock-bottom mortgage rates fueled a buying frenzy, have left many would-be homebuyers frozen out of the market. And a chronic shortage of homes for sale nationally, due partly to years of below-average new home construction, has helped prop up home prices even in a multiyear sales slump.
Homes purchased last month likely went under contract in February and March, when the average rate on a 30-year mortgage ranged from 5.98% — its lowest level in three and a half years — to 6.38%, according to mortgage buyer Freddie Mac. The average rate was at 6.37% last week.
While the average rate has remained below where it was a year ago, it has been fluctuating since the war with Iran began, as surging energy prices fuel anxiety about higher inflation.
Those who can afford to buy are benefiting from more properties on the market, although home inventory levels remain well below historical norms.
There were 1.47 million unsold homes at the end of April, up 5.8% from March and up 1.4% from April last year, NAR said. That’s the most homes on the market for the month of April going back to 2019, when the month-end inventory stood at 1.83 million homes.
That’s still short of the roughly 2 million homes for sale that was typical before the COVID-19 pandemic.
April’s month-end inventory translates to a 4.4-month supply at the current sales pace. Traditionally, a 5- to 6-month supply is considered a balanced market between buyers and sellers.
“We really need to see 30% growth in inventory, but we’re not really seeing that,” Yun said.
One factor helping boost the supply of homes for sale is many properties are sitting on the market longer. Properties typically remained on the market for 32 days last month before selling, down from 41 days in March, but up from 29 days in April last year, NAR said.
As homes take longer to sell, asking prices have started falling in many metro areas, especially in the South and Midwest. The national median home listing price was down in April from a year earlier, according to Realtor.com.
