U.S. existing home sales unexpectedly fell for a second month in April, adding to evidence that the resale market is struggling to gain traction amid near-record prices and high financing costs.
The number of contracts fell 1.9% from a month ago to 4.14 million on an annual basis, according to data from the National Association of Realtors released Wednesday. This figure lagged behind the average estimate of 4.23 million in a Bloomberg survey of economists.
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The nascent recovery in demand from a 13-year low in October has been hampered by limited inventory, keeping asking prices high. At the beginning of 2021, annualized sales were more than 2 million above the current pace, while mortgage interest rates were around 3%, compared to 7% now.
Inventory has risen slightly in recent months as some sellers decide they can no longer delay their moves, Yun said. Yet the situation remains well below pre-pandemic levels. The supply of homes on the resale market increased by more than 16% in April compared to the same month last year to 1.21 million.
At the current sales pace, selling all the properties on the market would take 3.5 months. Brokers consider anything under five months of supply indicative of a tight market.
Selling price
The average sales price rose 5.7% from a year ago to $407,600 – the highest in any data from April through 1999. Unlike the new home market, where rising inventories and prevailing builder incentives have caused prices to fall annually. Based on home sales, the resale market is experiencing increasing price growth year-over-year.
About 68% of homes sold were on the market for less than a month, compared to 60% in March, while more than a quarter were sold above the list price.
The NAR report also found that properties spent an average of 26 days on the market in April, compared to 33 days a month earlier and typical during the spring selling season. Sellers received an average of 3.2 offers.
Existing home sales make up the majority of U.S. housing sales and are calculated when a contract expires. The government will publish figures on the sales of new homes for April on Thursday.