Sales of previously occupied US homes fell in April, as elevated mortgage rates and rising prices discouraged prospective home buyers during what’s traditionally the busiest time of the year for the housing market.
Existing home sales dropped 0.5% last month from March to a seasonally adjusted annual rate of 4 million units, the National Association of Realtors said Thursday.
The sales decline marks the slowest sales pace for the month of April going back to 2009. March’s sales pace was also the slowest for that month going back to 2009.
Sales fell 2% compared with April last year. The latest home sales fell slightly short of the 4.10 million pace economists were expecting, according to FactSet.
Home prices increased on an annual basis for the 22nd consecutive month, although at a slower rate.
The national median sales price rose 1.8% in April from a year earlier to $414,000, an all-time high for the month of April.
“The affordability condition is clearly hurting the market, particularly higher mortgage rates,” said Lawrence Yun, NAR’s chief economist.
The US housing market has been in a sales slump since 2022, when mortgage rates began to climb from pandemic-era lows. Sales of previously occupied US homes fell last year to their lowest level in nearly 30 years.
The average rate on a 30-year mortgage has remained relatively close to its high so far this year of just above 7%, which it set in mid-January.
The average rate’s low point so far was five weeks ago, when it briefly dropped to 6.62%.
The elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have frozen out many would-be homebuyers, even as the inventory of homes on the market has risen sharply from last year.
There were 1.45 million unsold homes at the end of last month, a 9% increase from March, and 20.8% higher than April last year, NAR said.
That translates to a 4.4-month supply at the current sales pace, up from a 3.5-month pace at the end of April last year.
Traditionally, a 5- to 6-month supply is considered a balanced market between buyers and sellers.
