Existing home sales decrease as housing prices stand at record highs

by ian

Ian Patrick, FISM News


The housing market is showing signs that it may soon stabilize as the most recent numbers show a decrease in home sales, though housing prices continue to sit at an all-time high.

For the month of April, the National Association of Realtors (NAR) reports that existing home sales fell 2.4% to an annual rate of 5.61 million from 5.75 million the month before. This represents the third straight month of falling home sales.

Lawrence Yun, NAR’s chief economist, said the decrease in sales are likely due to “higher home prices and sharply higher mortgage rates.”

“It looks like more declines are imminent in the upcoming months, and we’ll likely return to the pre-pandemic home sales activity after the remarkable surge over the past two years,” Yun added.

Total housing inventory was up 10.8% from March, settling at 1,030,000 units for the month of April. Yun remarked that the supply for housing “has started to improve, albeit at an extremely sluggish pace.”

Commenting on the market itself, Yun said “sales are coming down, but listed homes are still selling swiftly, and home prices are much higher than a year ago.” In fact, NAR reports that median home prices for the month of April sit at $391,200 – marking a 14.8% increase from the average prices in April 2021 at $340,700.

Yet, as Yun said, homes are still selling swiftly. The average home stayed on the market for 17 days in the month of April and 88% of the homes sold were on the market for less than a month’s time.

As for the breakdown of home sales in the month of April, 28% were attributed to first-time buyers while 17% were attributed to single investors or second-time home buyers. All-cash sales made up 26% of the total transactions.

Broken down by region, the Midwest saw the greatest increase in home sales at 3.1% from the month prior followed by the Northeast with a 1.5% increase from March numbers. Housing sales fell in both the South (4.6%) and West (5.8%) compared to the month prior.

Median prices in all regions increased compared to April 2021 numbers. Prices in the West jumped 4.3% to $523,000 while the Northeast increased 8.1% to $412,100 and the Midwest increased 8.7% to $282,000. The South was the only region with a double-digit increase in prices compared to last year, as they rose 22.2% to $352,100.