Existing-home sales declined by 1.9% in April to a seasonally adjusted annual rate of 4.14 million, down from 4.19 million in March, according to a report released Wednesday by the National Association of Realtors (NAR). Sales were also down 1.9% year over year.
The median sale price for all types of existing homes rose to $407,600 in April, an increase of 5.7% from one year ago and the highest figure ever for the month of April. Sales slumped in every region except for the West compared to April 2023, but all four U.S. regions registered yearly price gains.
“Home prices reaching a record high for the month of April is very good news for homeowners,” NAR chief economist Lawrence Yun said in a statement. “However, the pace of price increases should taper off since more housing inventory is becoming available.”
The inventory of existing homes has been steadily increasing, despite elevated mortgage rates. At the end of April, unsold inventory sat at 1.21 million units, up 9% from March and up 16.3% from one year ago. Inventory was at a 3.5-month supply at the current sales pace, up from 3.2 months in March and up from 3 months in April 2023.
As of May 17, there were 578,000 single-family homes unsold on the market, up 1.7% for the week and 36% higher than one year ago, according to Altos Research. Additionally, price cuts are on the rise nationally as 34.4% of the homes on the market last week included a price cut, up 70 basis points from the week prior. Last year at this time, 29.9% of the homes on the market included price cuts.
“Many parts of the country still have very restricted inventory, just barely more than during the pandemic. In those places, like much of the northeast, supply is tight and well-priced homes are selling immediately,” Mike Simonsen, founder and president of Altos Research, wrote on Monday.
“It’s really important to keep this in mind this year. It helps us see that nationally, we’re not barrelling toward a home price crash. The market overall is tempered with restricted supply in many places.”
As of this week, every state has more inventory than a year ago, according to Altos Research. Even New York and Nevada, which were the last holdouts in terms of inventory growth, are now both in positive territory.
Meanwhile, single‐family housing starts in April fell to a seasonally adjusted annual rate of 1.031 million units, 0.4% below the revised March figure of 1.035 million. The growth in housing starts last month was driven by the multifamily sector, where the yearly pace ticked up to 322,000 units. But new multifamily starts also continue to track far below year-ago levels, according to Bright MLS chief economist Lisa Sturtevant.
Additionally, homebuilder confidence dwindled in May due to high mortgage rates and because of new regulations that require the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture (USDA) to insure mortgages for new single-family homes only if they are built to the standards of the 2021 International Energy Conservation Code. Trade groups say this will increase the cost of construction.
Overall, the strongest segments of the housing market have been upper-end and luxury properties, according to Sturtevant. Affluent buyers are less sensitive to rates and are more likely to have equity to put toward a home purchase.
“For the rest of the spring and into the summer, repeat buyers will be taking advantage of more inventory, but more moderate-income and first-time buyers are going to be more likely to wait for rates to come down,” Sturtevant said.
