Home Prices Posted Largest Annual Drop in More Than 11 Years in April

Sales of previously owned homes fell in April from the prior month and prices declined from a year earlier by the most in more than 11 years.

U.S. existing home sales, which make up most of the housing market, fell 3.4% in April from the prior month to a seasonally adjusted annual rate of 4.28 million, the National Association of Realtors said Thursday. April sales fell 23.2% from a year earlier.

The national median existing-home price fell 1.7% in April from a year earlier to $388,800, the biggest year-over-year price decline since January 2012, NAR said. Median prices, which aren’t seasonally adjusted, were down 6% from a record $413,800 in June. Home prices have fallen the most in the western half of the U.S., while prices continue to rise from a year earlier in many eastern markets.

Existing-home sales have declined for 14 out of the past 15 months and are down roughly one-third since the start of 2022.

A steep rise in mortgage rates since the start of 2022 has made home purchasing far less affordable to most buyers, weighing on demand. At the same time, the higher rates have discouraged current homeowners with locked-in low mortgage rates from selling, keeping the supply of homes on the market lower than normal.

Mortgage rates have fluctuated in recent months since hitting 20-year highs above 7% in October and November. The average rate for a 30-year fixed mortgage was 6.35% in the week ended May 11, according to Freddie Mac.

This week’s U.S. retail sales data will provide the latest update on inflation and the economy. New data on existing home sales, the housing market index and housing starts will also be released. WSJ’s Dion Rabouin reports. Photo: Saul Loeb/Agence France-Presse/Getty Images

“The home sales still struggle to recover,” said Lawrence Yun, NAR’s chief economist. “Right now home sales are just bouncing a little higher or a little lower, depending on the movements of the mortgage rates.”

Economists surveyed by The Wall Street Journal ahead of the release had estimated that sales of previously owned homes fell 3.4% in April from the prior month.

Housing-market activity typically picks up in the spring, because families with children often want to move homes between school years.
U.S. median existing-home price, change from a year earlierSource: National Association of RealtorsNote: April 2023 data is preliminary.

Existing-home sales have declined for 14 out of the past 15 months and are down roughly one-third since the start of 2022.

A steep rise in mortgage rates since the start of 2022 has made home purchasing far less affordable to most buyers, weighing on demand. At the same time, the higher rates have discouraged current homeowners with locked-in low mortgage rates from selling, keeping the supply of homes on the market lower than normal.

Mortgage rates have fluctuated in recent months since hitting 20-year highs above 7% in October and November. The average rate for a 30-year fixed mortgage was 6.35% in the week ended May 11, according to Freddie Mac.

This week’s U.S. retail sales data will provide the latest update on inflation and the economy. New data on existing home sales, the housing market index and housing starts will also be released. WSJ’s Dion Rabouin reports. Photo: Saul Loeb/Agence France-Presse/Getty Images

“The home sales still struggle to recover,” said Lawrence Yun, NAR’s chief economist. “Right now home sales are just bouncing a little higher or a little lower, depending on the movements of the mortgage rates.”

Economists surveyed by The Wall Street Journal ahead of the release had estimated that sales of previously owned homes fell 3.4% in April from the prior month.

Housing-market activity typically picks up in the spring, because families with children often want to move homes between school years.

But in many markets, a shortage of inventory is limiting home purchases. Homeowners who bought homes in recent years or refinanced to lock in low mortgage rates are reluctant to move, real-estate agents say.

Nationally, there were 1.04 million homes for sale or under contract at the end of April, up 7.2% from March and up 1% from April 2022, NAR said. At the current sales pace, there was a 2.9-month supply of homes on the market at the end of April.

The number of homes for sale is up from a year ago because houses are sitting on the market longer. But the number of new listings in April fell 21% from a year earlier, according to Realtor.com.

By Nicole Friedman
Source: WSJ WSJ

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