Key market data was released for April, showing some positive signs despite the fluctuation in rates! Some notable takeaways are that homes spend less time on the market, inventory is increasing, and home prices remain steady.
Existing Homes Selling Fast
In April, the pace of home sales declined slightly by 1.9%, reaching a 4.14-million-unit annualized pace, according to the National Association of REALTORS® (NAR). Despite this decline, the speed at which homes sold accelerated. Homes stayed on the market for an average of just 26 days, down from 33 days in March. Additionally, 27% of homes sold above the list price, indicating strong demand and competition even in the face of elevated mortgage rates.
Inventory saw a notable boost, with 1.21 million homes available for sale at the end of April, up 9% from March and 16.3% from the previous year. While inventory levels are still below what is considered healthy (a 3.5 months’ supply at the current sales pace), the increase is a positive step towards addressing the tight supply.
New Home Sales Slip in April
New Home Sales, which measure signed contracts on new homes, fell 4.7% from March to April and were 7.7% lower than in April of the previous year. This decline is understandable given that many buyers were shopping for homes during a period when mortgage rates peaked, leading some to delay their home search.
Despite the drop in sales, demand for new construction remains strong due to the persistent shortage of existing homes for sale. At the end of April, there were 480,000 new homes available, slightly up from the previous month. However, only 98,000 of these homes were completed, highlighting the need for more available supply to meet buyer demand. Builders are focusing on constructing smaller, more affordable homes, which affects the median price.
Looking Ahead
We've got some important market data coming this week, which will shed more light on the housing market and economic conditions, including appreciation data from Case-Shiller and the Federal Housing Finance Agency, as well as April's Pending Home Sales. Additionally, the second reading on first-quarter GDP and the Fed's favored inflation measure, Personal Consumption Expenditures, will offer more insights into the economic landscape.
Staying informed about these trends can help buyers, sellers, and real estate professionals make strategic decisions in the evolving market. While it's never a bad time to buy a house, working with a professional that understands market trends will help homeowners make the most of their investment.
MPR
Mortgage Market Analyst
