The latest data from the National Association of Realtors has revealed some interesting trends in the real estate market for the month of April. The report shows a 1.9% decrease in sales of previously owned homes compared to March, with a total of 4.14 million units sold on a seasonally adjusted annualized basis. This decline comes as a surprise, as experts had initially predicted a slight increase in sales for the month.
One of the key factors contributing to the drop in home sales is the significant increase in mortgage rates that occurred in February and continued to rise throughout April. With rates reaching as high as 7%, potential buyers may have been deterred from making purchases, leading to a decrease in overall sales volume. Lawrence Yun, the chief economist for the Realtors, highlighted the impact of these rising rates on the housing market, noting that the 300 basis point increase from pre-Covid levels has put the industry in uncharted territory.
Despite the decline in sales, total housing inventory saw a 9% increase in April compared to the previous month, reaching 1.21 million units. This represents a 16% year-over-year increase, although the supply of homes on the market is still relatively low at just a 3.5-month supply at the current sales pace. Yun emphasized the importance of achieving a six-month supply for a balanced market between buyers and sellers.
The data also revealed interesting trends in pricing based on different price points. Sales of homes priced below $100,000 saw a significant decline of 7.1% year over year, while homes priced over $1 million experienced a 40% increase in sales. The supply of homes priced at more than $1 million also saw a substantial 34% increase, indicating strong activity in this high-end segment of the market. This could be attributed to the fact that tight supply conditions have put upward pressure on prices, with the median price of an existing home reaching $407,600 in April, a 5.7% increase from the previous year.
When looking at regional sales data, the report revealed some interesting variations across different parts of the country. In the Northeast, sales fell by 4% from March and 4% from April 2023, with a median price of $458,500, an 8.5% year-over-year increase. The Midwest also saw a decline in sales, both month to month and year over year, with a median price of $303,600, up 6% from the previous year. The South experienced a 1.6% decrease in sales from March and a 3.1% drop from the year before, with a median price of $366,200, a 3.7% increase from last year. Sales in the West were down 2.6% for the month but rose 1.3% from the previous year, with a median price of $629,600, up 9.3% from April 2023.
The latest data on the real estate market for April provides valuable insights into the current state of the industry. The combination of rising mortgage rates, limited inventory, and varying regional trends has contributed to a decline in home sales, despite ongoing strong demand. As the market continues to evolve, it will be important to monitor these factors closely to better understand the dynamics at play in the real estate sector.