Models of houses sit on a downward arrow
Illustration by Lanette Behiry/Real Estate News

Existing home sales lose more momentum in April 

Despite the sluggish pace, inventory is up, which is “nudging the market in a more buyer-friendly direction.”

Updated May 23, 2024
3 minutes

Key points:

  • Existing home sales in April slid 1.9% since March and also 1.9% year-over-year, according to the latest NAR data.
  • However, home prices keep climbing — NAR reported that last month’s $407,600 median home price was the highest price recorded for the month of April.
  • Inventory continues to improve from last year, particularly in the higher-end market segment.

After starting the year strong, existing home sales lost momentum in March and continued their slump in April. 

According to the National Association of Realtors, existing sales slid 1.9% last month to a seasonally adjusted annual rate of 4.14 million home sales. Existing sales were also down 1.9% year-over-year. 

All four U.S. regions that NAR tracks — the Northeast, Midwest, South and West — saw home sales fall month-over-month, but the West managed to tally a year-over-year improvement.

New home sales fared even worse. The U.S. Census Bureau reported this week that new home sales were down 4.7% between March and April, and down 7.7% year-over-year. Sales of new single-family homes in the U.S. were at a seasonally adjusted annual rate of 634,000 in April.

However, one trend that has remained consistent is rising home prices

April's median existing-home sales price of $407,600 was up 5.7% compared to a year prior, NAR reported, marking the tenth consecutive month of year-over-year gains. Additionally, the median sale price is the highest price ever recorded for the month of April. 

NAR Chief Economist Lawrence Yun said the price growth was "very good news for homeowners," but added that "the pace of price increases should taper off since more housing inventory is becoming available."

New home prices were also up, rising nearly 4% year-over-year, with the median sales price hitting $433,500 in April.

Inventory on the rise

Home inventory at the end of April was 1.21 million units, or roughly 3.5 months of supply, NAR said. This figure has increased 9% from the previous month and more than 16% from the same time a year ago. The rising supply of higher-end homes was particularly notable, with the inventory of homes priced $1 million or more up 34% in the last year. 

"The strongest segment of the housing market has been the upper-end and luxury market where buyers are less rate sensitive and are more likely to have equity to put toward a home purchase," Bright MLS Chief Economist Dr. Lisa Sturtevant said. "Buyers and sellers of higher-end homes helped to push the median sold price up."

And additional inventory of existing homes may cause new home sales to slow even further.

"As the inventory of existing homes has increased, homebuyers have choices and demand for new construction has cooled slightly," Sturtevant said. "We can also see the inventory of unsold new construction also building up. At the end of April, the new home inventory was 12.1% higher than a year ago, the biggest year-over-year supply gain since December 2022."

Market is slowly thawing

It's still uncertain if those who have been holding out on buying and waiting for lower interest rates will see much relief, Dr. Selma Hepp, Chief Economist for CoreLogic suggested in her commentary.

"The housing market continues to unthaw slowly amid considerable affordability challenges brought on by high interest rates and rising homeownership expenses," she said. 

"Lower mortgage rates later this year will provide a breather, though the average potential homebuyer continues to maintain a wait-and-see approach. Improvements in existing for-sale inventory are critical and will help thaw out sales further." 

But more inventory is certainly a good thing for buyers, Chief Economist Danielle Hale said, suggesting that "rising for-sale inventory is slowly nudging the market in a more buyer-friendly direction as months supply hit 3.5 months."

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