Sales of existing homes are tracking at four-million-a-year as America’s strong record of value increases continues, according to the latest housing report from the National Association of Realtors (NAR).
Prices are up 1.8% on 12 months ago, and we have chalked up our 22nd successive monthly increase in values.
Existing home sales dipped 0.5% in April and there was a 2% drop for all residential transactions compared with the corresponding period 12 months ago.
NAR says that by calculating the current speed of home sales, there is 4.4-months’ worth of supply of homes for sale – the most since 2020.
Sale volumes have still not recovered to pre-pandemic levels. Influencing factors include the general uncertainty during Covid, the ensuing spike in inflation and resulting higher interest rates.
Nevertheless, values are holding their own with the median price for an existing-home at $414,000, up 1.8% from one year ago ($406,600).
NAR says the Northeast and Midwest posted price increases, and the South and West registered price decreases.
NAR chief economist Lawrence Yun said: “At the macro level, we are still in a mild seller’s market. With the highest inventory levels in nearly five years, consumers are in a better situation to negotiate.”
Mr Yun says he expects American buyers to start burning through the inventory when they see a “meaningful decline in mortgage rates”.
In recent weeks, the White House has attempted to pressure the Federal Reserve to cut rates. However, the cash rate has not moved from 4.5% since last December. Freddie Mac says the 30-year fixed-rate mortgage averaged 6.81% as of mid-May, down from 7.02% one year ago. That’s not the “meaningful decline” NAR is talking about.
The average residential sale now takes 29 days, up three days on 12 months ago.
First-time buyers remain a strong market component, accounting for 34% of sales.
NAR says pending home sales decreased 6.3% in April – an indication inventory will back up further.
Its Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings – dripped 6.3% to 71.3. Year-over-year, pending transactions retreated 2.5%.
Mr Yun said. “Despite an increase in housing inventory, we are not seeing higher home sales. Lower mortgage rates are essential to bring homebuyers back.”