Year-to-year, sales dropped 5.9%. The inventory of for-sale homes, while higher at a 2.2-months’ supply, means the U.S. remains in “seller’s market” territory.
WASHINGTON – In April, existing-home sales recorded a third straight month of declines, according to the National Association of Realtors®’ (NAR) monthly report.
Month-over-month sales were split among the four major U.S. regions: Two areas posted gains and two experiencing posted April declines. Year-over-year, all four regions saw a drop in sales.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – slid 2.4% from March to a seasonally adjusted annual rate of 5.61 million in April. Year-over-year, sales dropped 5.9% (5.96 million in April 2021).
“Higher home prices and sharply higher mortgage rates have reduced buyer activity,” says Lawrence Yun, NAR’s chief economist. “It looks like more declines are imminent in the upcoming months, and we’ll likely return to pre-pandemic home sales activity after the remarkable surge over the past two years.”
Total housing inventory at the end of April amounted to 1,030,000 units, up 10.8% from March and down 10.4% from one year ago (1.15 million). Unsold inventory is at a 2.2-month supply at the current sales pace, up from 1.9 months in March and down from 2.3 months in April 2021.
“Housing supply has started to improve, albeit at an extremely sluggish pace,” adds Yun.
He also noted the rare state of the current marketplace.
“The market is quite unusual as sales are coming down, but listed homes are still selling swiftly, and home prices are much higher than a year ago,” says Yun. “Moreover, an increasing number of buyers with short tenure expectations could opt for 5-year adjustable-rate mortgages, thereby assuring fixed payments over five years because of the rate reset. The cash buyers, not impacted by mortgage rate changes, remain elevated.”
The median existing-home price for all housing types in April was $391,200, up 14.8% from April 2021 ($340,700), with prices higher in each region. It marks 122 consecutive months of year-over-year increases, the longest-running streak on record.
Properties typically remained on the market for 17 days in April, equal to both the number of days in March 2022 and in April 2021. Nine out of 10 (88%) homes sold in April 2022 were on the market for less than a month.
First-time buyers were responsible for 28% of sales in April, down from 30% in March and 31% in April 2021.
All-cash sales accounted for 26% of April’s transactions, down from 28% in March and up from 25% recorded in April 2021.
Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in April, down from 18% in March and equal to 17% in April 2021.
Distressed sales – foreclosures and short sales – represented less than 1% of sales in April, equal to the percentage seen in March and down from 2% in April 2021.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.98% in April, up from 4.17% in March. The average commitment rate across all of 2021 was 2.96%.
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