Paul Weissman, The Associated Press
21 hours ago
FILE – March 29, 2024 View of a housing development in Middlesex, Pennsylvania. On Wednesday, May 22, 2024, the National Association of Realtors released existing home sales figures for April. (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 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. The number of homes sold fell 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 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.
Interest rates on the benchmark 30-year fixed-rate mortgage have risen in five of the past six weeks, to 7.02% from 6.39% a year ago, and would-be homebuyers are also hesitant to make purchases due to rising prices, in part due to a tight housing inventory.
Housing supply rose 9% from March to 1.2 million, the fourth consecutive year of increase, but remains low — from 1.7 million before the pandemic. Homeowners are hesitant to put their homes on the market in part because they don’t want to give up their existing, low-interest mortgages to buy a new one with higher interest rates.
The housing market could get some relief if the Federal Reserve cuts interest rates later this year.
“Home sales would typically surge at this time of year, but mortgage rates continue to hold back both listings and purchases,” said Robert Frick, an economist at Navy Federal Credit Union. “And unfortunately, prices continue to rise, putting homebuying further out of reach for low- and even middle-income Americans. The only real remedy to this situation is for the Federal Reserve to cut interest rates later this year, which would ultimately have a ripple effect on mortgage rates.”
In the housing market, sales of high-priced homes were active. Homes priced over $1 million rose 40% year-over-year, in part because the inventory of these homes surged 34%.
A third of sales were made by first-time buyers, the highest percentage since January 2021 but still below the historical 40% mark.
