Paul Wiseman, Associated Press
10 hours ago
FILE – A view of a housing development in Middlesex, Pennsylvania, March 29, 2024. The National Association of Realtors released its April existing home sales report on Wednesday, May 22, 2024. (AP Photo/Gene J. Puskar, File)
WASHINGTON (AP) — Rising mortgage rates and rising home prices continued to hurt the spring home buying season last month.
Existing home sales in April fell 1.9% to a seasonally adjusted annual rate of 4.14 million from a revised 4.22 million in March, the National Association of Realtors said Wednesday. Sales were down nationwide, with declines of 4% in the Northeast, 2.6% in the West, 1.6% in the South and 1% in the Midwest.
The median price of existing homes rose 5.7% to $407,600, the 10th straight year of increases and the highest April price.
Lawrence Yun, the association’s chief economist, said the decline in sales was “a little frustrating.” Economists had expected sales to be 4.2 million.
Interest rates on the benchmark 30-year fixed-rate loan have risen in five of the past six weeks, rising to 7.02% from 6.39% a year ago. People who want to buy a home are also hesitant to do so because prices are soaring, partly due to tight housing inventory.
Housing supply increased 9% from March to 1.2 million units, the fourth consecutive increase, but remains at a low level. Before the pandemic, there were 1.7 million homes. Homeowners are hesitant to put their homes on the market, in part because they don’t want to forfeit their existing mortgages at low interest rates and buy new homes at higher rates.
If the Fed cuts interest rates later this year, that could provide some relief for the housing market.
“Typically, we would see a surge in home sales at this time of year, but mortgage interest rates continue to suppress listings and purchases,” said Robert Frick, an economist at Navy Federal Credit Union. Ta. “And unfortunately, prices continue to rise, pushing opportunities away from low-income and even middle-income Americans. The only real relief is if the Fed cuts interest rates later this year. This will ultimately be reflected in mortgage interest rates.”
The housing market was booming at the higher end of the market: Prices for homes priced at more than $1 million rose 40% from a year ago, in part because inventory of such homes jumped 34%.
A third of sales were made by first-time buyers, the highest share since January 2021, but still below the 40% made up by past buyers.
