Paul Wiseman, Associated Press
6 minutes ago
FILE – Housing development in Middlesex, Pennsylvania, photographed March 29, 2024. The National Association of Realtors will report on existing home sales for April on Wednesday, May 22, 2024. (AP Photo/Jean J. Pasker, File)
WASHINGTON (AP) — High mortgage rates and rising prices continued to put a damper on the spring home-buying season last month.
Existing home sales in April totaled a seasonally adjusted annual rate of 4.14 million units, down 1.9% from March’s revised figure of 4.22 million units, the National Association of Realtors said Wednesday. Sales declined across the country, with sales down 4% in the Northeast, 2.6% in the West, 1.6% in the South and 1% in the Midwest.
The median price of an existing home rose 5.7 percent to $407,600, the 10th consecutive increase and the highest April price on record.
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.
The interest rate on the benchmark 30-year fixed-rate loan has risen in five of the past six weeks to 7.02% from 6.39% a year ago. Potential home buyers are also hesitant about rising prices, due in part to a tight inventory of available homes.
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 lowers interest rates this year, the housing market could get some relief.
“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.”
Sales were stronger in the luxury market. Homes priced at $1 million or more jumped 40% compared to a year ago, in part because the inventory for those homes jumped 34%.
A third of sales came from first-time buyers, the highest share since January 2021, but still below the 40% made up by past buyers.
