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Home sales in the US fell again in April when prices reached another record high

The median price of a home in April was a record high of $ 391,200, up 14.8% from a year ago, according to a report by the National Association of Realtors. Although inflation was robust, there was a lower annual increase than in recent months, and determined buyers pushed their budgets to the brink of buying a home before mortgage rates rose further.

The price increase marks more than a decade with subsequent increases from year to year, the longest running series ever.

However, as the average interest rate on a 30-year mortgage passed over 5% in April, the rising cost of financing a home pushed some potential home buyers out of the market.

Sales of existing homes, which include detached houses, terraced houses, housing associations and cooperative homes, fell 2.4% from the previous month and 5.9% from the previous year. It was the weakest sales activity since June 2020.

“Higher house prices and sharply higher mortgage rates have reduced buyer activity,”[ads1]; said Lawrence Yun, NAR’s chief economist. “It looks like more declines are imminent in the coming months, and we are likely to return to pre-pandemic home sales activity after the notable increase over the past two years.”

Affordability is still a challenge

While impressions of available homes for sale were down in April, according to the tracking NAR does with lock boxes, demand among buyers remains strong, Yun said. In April, a typical home was sold in a very fast 17 days, and 88% of the homes were sold in a month or less.

“The number of households interested in becoming homeowners remains high, despite declining confidence that now is a good time to buy,” said Danielle Hale,’s chief economist. “This is especially true among younger home buyers, who are likely to be first-time buyers and who struggle to save on down payment as rental prices continue to break records.”

Affordability is still a challenge for first-time home buyers, who only accounted for 28% of the market in April. A year ago, they accounted for 31% of the market.

But not only are record prices and rising mortgage rates putting a squeeze on home buyers, the persistently low supply of available homes to buy still weighs on sales.

The stock is increasing, but is still low

The stock of homes for sale rose 10% in April from March, but was down 10.4% from a year ago, according to NAR.

“Housing supply has started to improve, albeit at an extremely slow pace,” said Yun.

He noted that the current housing market is in a rare state. While house price increases and a low number of days on the market indicate a strong housing market, he said, the decline in sales is a sign of weakening.

“Maybe we’re moving from an intense market where many homes are getting more offers to a less intense market,” he said. “Transactions continue and happen quickly, if inventory is available.”

Unfortunately, he said, there is a huge wave of potential inventory that is not unlocked.

Some homeowners who may have considered selling their home may decide to stay in part because they have refinanced themselves at a very low interest rate for the past two years. “They do not want to give up on super-low mortgage rates,” Yun said.

While higher prices are expected to eventually curb price increases, homeowners still sit with most cards.

“Sellers will want to stay on top of a rapidly adjusting market that is ready for a reset,” Hale said.

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