Existing Home Sales Retreat Amid Mortgage Rate Volatility

Existing home sales fell to three-month low in April as limited inventory and fluctuating mortgage rates continued to weight on homebuyers, according to the National Association of Realtors (NAR). With inflation continuing to ease and rent growth expected to slow, existing home sales will rebound, despite the recent declines.

Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, fell 3.4% to a seasonally adjusted annual rate of 4.28 million in April. On a year-over-year basis, sales were 23.2% lower than a year ago.

The first-time buyer share rose to 29% in April, up from 28% in both March 2023 and April 2022. The April inventory level measure increased slightly to 1.04 million units and was up 1.03 million from a year ago.

At the current sales rate, April unsold inventory sits at a 2.9-months’ supply, up from 2.6-month last month and 2.2-months reading a year ago. This inventory level remains very low, compared to balanced market conditions (4.5 to 6 months’ supply), and illustrates the long-run need for more home construction.

Homes stayed on the market for an average of 22 days in April, down from 29 days in March but up from 17 days in April 2022. In April, 73% of homes sold were on the market for less than a month.

The April all-cash sales share was 28% of transactions, up from 27% last month and 26% a year ago. All-cash buyers are less affected by changes in interest rates.

The April median sales price of all existing homes was $388,800, down 1.7% from a year ago. The median existing condominium/co-op price of $348,000 in April was up 0.7% from a year ago.

Geographically, all four regions observed a decrease in existing home sales in April, ranging from 1.9% in the Northeast and Midwest to 6.1% in the West. On a year-over-year basis, all four regions continued to see a double-digit decline in sales, ranging from 20.2% in the South to 31.3% in the West.

The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell 5.2% from 83.2 to 78.9 in March. On a year-over-year basis, pending sales were 23.2% lower than a year ago per the NAR data.