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The spring housing market was more tepid than hot in April for home sales.
Sales of existing homes shrank by 1.9% in April compared with March, according to a recent report from the National Association of Realtors®.
Sales also fell annually, dipping 1.9% from April 2023 to a seasonally adjusted annual rate of 4.14 million homes.
“Home sales changed little overall,” said NAR Chief Economist Lawrence Yun in a statement.
The dip in monthly closings is likely due to the rise in mortgage rates, which surged past 7% in April and hit a new high for 2024. Mortgage rates averaged 7.02% for 30-year fixed loans in the week ending May 16, according to Freddie Mac.
This jump likely saw many buyers sit out the housing market, and might have caused some homeowners to stay put as well. Many would-be sellers are reluctant to trade in their existing low mortgage rates from years past to a rate that might now be doubled.
“There were ups and downs in mortgage rates throughout March, before another inflation-driven mid-month surge in April,” Realtor.com® Chief Economist Danielle Hale said in a statement. “Buyers who closed on homes in April, and likely locked mortgage rates in March, faced a fair amount of mortgage rate uncertainty and generally higher rates. These conditions were likely a drag on home sales.”
It’s not just high mortgage rates clobbering the market; April saw the highest home prices ever for the month of April. Home prices jumped 5.7% year over year, hitting a median of $407,600. (Prices were a median of $385,800 in April 2023.) This was the 10th month in a row of annual price increases.
“Home prices reaching a record high for the month of April is very good news for homeowners,” said Yun. “However, the pace of price increases should taper off since more housing inventory is becoming available.”
Indeed, the total housing stock hit levels not seen since October 2021, which might also account for the lull in home sales. The number of existing homes on the market at the end of April was 1.21 million, an increase of 9% from March.
Who bought homes in April
First-time homebuyers were active in April, accounting for 33% of sales compared with 32% in March and 29% in April 2023.
Of the total home sales, 28% were all-cash buyers, the same percentage as last month. Individual investors or second-home buyers, a large percentage of cash buyers, snapped up 16% of existing homes in April, up from 15% in March.
Only 2% of sales were foreclosures and short sales.
Where home sales are rising and falling the most
Sales slipped modestly in every region of the United States from March to April.
Sales declined the most in the Northeast, falling 4% from March and 3% year over year. The median existing-home price in the region was $458,500, up 8.5% from the previous year.
The West saw sales slide by 2.6% since last month, yet rise 1.3% from the year prior. The median price in the West was $629,600, a 9.3% jump from April 2023.
Existing-home sales in the South dropped 1.6% from March to April, down 3.1% from the prior year. The median price in the South was $366,200, up 3.7% annually.
The Midwest saw the smallest decline, with home sales ticking down 1% since March and one year ago. The median price in the Midwest was $303,600, a bump of 6% from April 2023.
However, buyers looking to capitalize on the boost in housing stock might want to look at specific metros rather than regions.
“In joint research, Realtor.com® and the National Association of Realtors® found that markets where affordability is currently low, such as Spokane, WA; Lakeland, FL; and Salt Lake City, UT, are some of the areas where affordability will see the biggest boost,” said Hale, “while currently affordable markets like Pittsburgh, PA, and Detroit, MI, are expected to see smaller affordability improvements.”