According to a new report by the National Association of Realtors (NAR), the housing market did not show improvement in April. Sales of previously owned homes continued to decrease. In April, the number of sales decreased by 3.4% compared to the previous month and by 23.2% compared to April of the previous year.
According to NAR chief economist Lawrence Yun, the current housing market is being impacted by a combination of factors, such as job growth, low inventory, and unstable mortgage rates. As a result, the demand for housing is experiencing both positive and negative effects.
According to Yun, home prices increased from March, but they were 1.7 percent lower than in April 2022, marking the biggest yearly decrease since January 2012.
Existing-home sales continue to decline
The existing-home sales statistic includes all sales of previously owned homes, such as single-family houses, condos, townhouses, and co-ops. The latest report from NAR shows a decline in the annual pace of sales in April 2023, with only 4.28 million homes sold nationwide, which is lower than usual.
All four regions of the country have seen a decline in existing-home sales on a month-over-month and year-over-year basis, with the Western region experiencing the most significant yearly drop of 31.3 percent and a 6.1 percent decrease in the past month. Meanwhile, the South saw sales fall by 3.4 percent month-over-month and 20.2 percent from the previous year’s time. Sales in the Midwest decreased by 1.9 percent compared to March and by 21.5 percent compared to the same period of the prior year. The Northeast also experienced a 1.9 percent decline in sales compared to the previous month and a year-over-year fall of 23.9 percent.
Properties remained on the market for 22 days, which is an improvement from 29 days in March and 34 days in February. However, when compared to last year, the number of days on the market was longer, as the average in April 2022 was 17 days.
According to Yun, home sales will gradually improve in the next 12 months. He believes that as consumer price inflation stabilizes and rents slow down due to increased apartment construction, the Federal Reserve will likely change its monetary policy from tightening to neutral or even loosening. Despite a few months of fluctuations, Yun is confident that the housing market will recover.
Median sale prices continue falling as well
The median sale price for existing homes across the country increased from the previous month to $388,800. However, compared to April 2022, the median price decreased by 1.7%. This marks the third consecutive month of year-over-year declines, following a long stretch of increases. Before the drop in February, the U.S. housing market had experienced an impressive run of 131 months of year-over-year median sale price growth – this was the longest streak since NAR began keeping records.
The median price in the West is the highest among all regions and is $578,200, which is down by 8 percent from last year. In the Northeast, the median price increased to $422,700, up by 2.8 percent. Meanwhile, the South experienced a slight drop in median price by 0.6 percent to $357,900, and the Midwest saw an increase in median price by 1.8 percent to $287,300.
Housing inventory remains low
At the end of April, there were 1.04 million homes available for sale, which is a 7.2 percent increase from March and a 1 percent increase from the previous year. However, this only accounts for a 2.9-month home supply, which is insufficient to have a balanced market. Typically, a balanced market requires a supply of 5 to 6 months’ worth of homes.