The spring housing market continues to struggle amid high interest rates and low consumer confidence.
Sales of previously owned homes in April declined 0.5% from March to a seasonally adjusted, annualized rate of 4 million units, according to the National Association of Realtors. That is the slowest April pace since 2009.
Sales were down 2% from April of last year. Housing economists were expecting a gain of 2.7%.
This count is based on closings, meaning contracts that were likely signed in February and March, before mortgage rates moved higher in April.
“Home sales have been at 75% of normal or pre-pandemic activity for the past three years, even with seven million jobs added to the economy,” said Lawrence Yun, NAR’s chief economist, in a release. “Pent-up housing demand continues to grow, though not realized. Any meaningful decline in mortgage rates will help release this demand.”
Inventory jumped 9% month to month and was nearly 21% higher than April of last year. There were 1.45 million homes for sale at the end of April, which at the current sales pace represents a 4.4-month supply. That is the highest level in five years, but still below the six-month supply which is considered a balanced market. One year ago, there was a 3.5-month supply.
More supply is starting to cool prices. The median price of an existing home sold in April was $414,000, an increase of just 1.8% year over year. That is the highest April price on record, but the slowest appreciation since July 2023. Annual price gains had been much higher last year. Both the South and West regions saw prices fall.
“At the macro level, we are still in a mild seller’s market,” Yun said. “But with the highest inventory levels in nearly five years, consumers are in a better situation to negotiate for better deals.”
Homes sat on the market an average 29 days, faster than March, but longer than April of last year. First-time buyers accounted for 34% of sales, almost the same as last year.
Cancellation rates, or how many people cancel their contracts, are also rising, hitting 7% of sales in April. That is up from a recent average of 3% to 4%.
Activity is still stronger on the higher end of the market. Sales of homes priced more than $1 million rose nearly 6% from a year ago. Those priced between $100,000 and $250,000 dropped just over 4%. Yun, however, noted that the gains on the high end are shrinking.
“I think that is partly due to the stock market shakeout that has occurred,” he said.
