Resales of existing homes dropped in April too, representing the weakest pace for that month since 2009. The National Association of Realtors (NAR) announced a 0.5% drop in sales compared to March. That decline has resulted in a seasonal adjusted annualized pace of only 4 million units. Like much of the housing market’s failed recovery, this latest downturn is being largely felt equally. This is all happening even with 4.9 million jobs added to the economy.
According to Lawrence Yun, NAR’s chief economist, “Home sales have been at 75% of normal or pre-pandemic activity for the past three years, even with seven million jobs added to the economy.” By the end of April, just 1.45 million homes were listed for sale. This was equivalent to a supply of 4.4 months. This supply level is the most seen in five years, marking a major turning point in the market conditions.
Residential properties are going under contract in a flash, with an average of 29 days on market. That’s an improvement from March, but a slowdown from April of 2022. On another troubling front, sales were down 2% from April 2022.
Just last month, the median price of an existing home sold hit $414,000, up 1.8% from the year prior. This would represent the highest price ever recorded in April. Yet, at the same time, it illustrates the most glacial rate of appreciation we’ve witnessed since last July 2023. Yun noted that while “pent-up housing demand continues to grow, though not realized,” any significant decline in mortgage rates could help alleviate this situation.
Finally, the high cancellation rates further highlighted markets’ hesitance, reaching 7% of sales in April. Yun attributed part of this to the recent volatility in the stock market, stating, “I think that is partly due to the stock market shakeout that has occurred.”
Despite these trends, Yun emphasized that “at the macro level, we are still in a mild seller’s market.” Even as sales decline and inventory begins to increase, sellers find themselves in the driver’s seat. A mix of ongoing demand and a tight housing market due to low overall production plays in their favor.