US home sales are down despite the steepest price drop in 11 years

5/22/2023

Per CNN

Usually, when home prices are down, home sales go up. However, this wasn't the case in April as US home sales fell by their steepest annual rate in 11 years, but sales remained low.

The National Association of Realtors reported that home prices saw the biggest drop since 2012, and despite that, home sales fell for the second month in a row. This came after a rise in February, which broke the full year of constant decline.

Here are the type of properties that saw a drop in sales.

single-family homes
townhomes
condominiums
co-ops

From March to April, these types of properties saw a 3.4% decline in sales. To top everything off, annual sales were down by 23%, which dropped to just 4.28 million units from 5.57 units a year ago.

NAR's chief economist Lawrence Yun gave a statement regarding the situation, highlighting how home sales remained above cyclical lows. He also commented on the reasons why there was a "push-pull" effect when it came to demand.

Yun: “Home sales are bouncing back and forth but remain above recent cyclical lows... The combination of job gains, limited inventory and fluctuating mortgage rates over the last several months have created an environment of push-pull housing demand.”

In February, it was reported that median home prices saw a spike of 10.2% in 2022, but KPMG economists said that there could be a 20% drop in home prices in 2023. In December, sales dropped by 34% year-over-year.

In November, it was reported that households must make at least $100,000 to buy a typical home for sale. In October, it was reported that people needed to make $107,000 annually, which was up by 46% from just a year ago.

See flow at unusualwhales.com/flow.

Other News:

Resources:

CNN