The Blubber

The spring housing market remains under pressure as high interest rates and subdued consumer confidence weigh on activity.

Sales of previously owned homes fell 0.5% in April from the previous month, reaching a seasonally adjusted annual rate of 4 million units, according to the National Association of Realtors. This marks the slowest pace for April since 2009.

Compared to a year earlier, sales were down 2%, defying expectations for a 2.7% increase. The figures reflect contract closings, meaning most of the deals were signed in February or March, before mortgage rates edged higher in April.

“Home sales have remained at just 75% of normal or pre-pandemic levels for the past three years, even as the economy has added seven million jobs,” said Lawrence Yun, chief economist at NAR. “There’s still considerable pent-up demand, but it hasn’t materialized. A significant drop in mortgage rates could help unlock that demand.”

Inventory rose 9% month-over-month and was up nearly 21% compared to April 2023. By the end of April, there were 1.45 million homes on the market, translating to a 4.4-month supply at the current sales pace — the highest level in five years. However, it remains below the six-month benchmark for a balanced market. A year ago, inventory sat at a 3.5-month supply.

The increase in supply is starting to temper home prices. The median price for an existing home sold in April was $414,000 — up 1.8% from a year earlier. While this is the highest median price ever recorded for April, it represents the slowest pace of appreciation since July 2023. Price declines were recorded in both the South and West regions.

“Broadly, it’s still a mild seller’s market,” Yun noted. “But with inventory at its highest in nearly five years, buyers are in a stronger position to negotiate.”

Homes remained on the market for an average of 29 days — slightly quicker than in March but longer than April last year. First-time buyers made up 34% of purchases, roughly in line with last year’s level.

Contract cancellation rates rose to 7% in April, up from the more typical 3–4% range in recent months.

Higher-end properties continue to show stronger activity. Sales of homes priced over $1 million rose nearly 6% compared to the previous year. In contrast, sales of homes priced between $100,000 and $250,000 declined by just over 4%. However, growth at the upper end of the market appears to be tapering.

“That may be partly linked to recent volatility in the stock market,” Yun added.