Spring Home Sales Hit a Snag

In April, the housing market took a hit. Sales of existing homes slowed down to a pace not seen since 2009. This drop happened despite a growing number of jobs in the economy. The slowdown is due to high interest rates and a lack of confidence among buyers. The National Association of Realtors reported that sales fell slightly from March to April. This drop was unexpected, as experts had predicted an increase. The data reflects deals that were likely finalized in February and March, before interest rates went up in April. This slowdown has been going on for three years. There is a lot of pent-up demand for housing. A drop in mortgage rates could help release this demand. The number of homes available for sale went up by 9% from March to April. This is almost 21% more than what was available in April of the previous year. At the end of April, there were 1. 45 million homes on the market. This supply would last about 4. 4 months at the current sales rate. This is the highest level in five years, but it is still below the six-month supply that is considered balanced. More homes on the market are starting to affect prices. The median price of an existing home in April was $414, 000. This is a small increase from the previous year. It is the highest April price on record, but the slowest increase since July 2023. The South and West regions saw a drop in prices. Even with more homes on the market, it is still a seller's market. However, buyers have more room to negotiate better deals. Homes are staying on the market for an average of 29 days. This is faster than in March but slower than in April of the previous year. First-time buyers made up 34% of sales, which is almost the same as last year. The number of people canceling their contracts is also rising. In April, 7% of sales were canceled. This is up from the recent average of 3 to 4%. The higher-end market is still doing better. Sales of homes priced over $1 million rose nearly 6% from a year ago. However, homes priced between $100, 000 and $250, 000 saw a drop in sales. The gains at the high end are shrinking. This could be due to recent changes in the stock market.