April decline of 1.9% comes as mortgage rates stay elevated and prices near highs
US Home sales fell in April for the second straight month, as high mortgage rates and near record prices continue to stall the market during the prime selling season. Sales of previously owned homes decreased 1.9% from the prior month to a seasonally adjusted annual rate of 4.14 million, the National Association of Realtors said Wednesday.
The decline last month came as a surprise to housing analysts. Economists surveyed by The Wall Street Journal estimated sales of previously owned homes rose a seasonally adjusted 1.4% in April from March. But high mortgage rates are keeping a lid on the spring season, typically the busiest time of year in the housing market.
In March, existing-home sales posted their biggest monthly decline in more than a year. The low inventory of homes for sale is also thwarting buyers, because high rates have prompted many homeowners to stay put.
At the current sales pace, there was a 3½- month supply of homes on the market at the end of April, below the four to six months’ supply that is generally considered a market balanced between buyers and sellers. That shortage is pushing prices higher.
The national median existing-home price rose 5.7% in April from a year earlier to $407,600, NAR said. That was the highest price for any April data going back to 1999 and approaching the record high for any month of $413,800. Prices aren’t adjusted for inflation. “Record-high home prices are hitting affordability,” said Lawrence Yun, NAR’s chief economist.
“For a home buyer, it is a very frustrating market out there.” On an annual basis, existing- home sales were down 1.9% in April. These sales make up most of the housing market and were largely based on contracts signed in March and February. Mortgage rates have fallen this month. But the average rate on the standard 30-year fixed mortgage is still above 7%, according to last week’s data from Freddie Mac.
Some people who have been waiting for borrowing rates to fall before selling their homes can’t wait any longer, economists and real-estate agents say.
Source: Wall Street Journal
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