The United States spring housing market experienced modest growth in home resales during April, though activity remained below analysts' expectations, according to a new report from TD Economics.
Existing home sales increased by 0.2 percent month over month, translating to an annualized pace of approximately 4.02 million units. This figure fell short of the market consensus of 4.05 million units.
Condo Sales Drive Growth
Condominium resales were the primary driver of growth, surging 2.7 percent month over month to an annualized rate of 380,000 units. In contrast, single-family detached home sales remained flat at around 3.64 million annualized units.
Regionally, sales rose by more than 2 percent in the Midwest. Activity was largely unchanged in the South and Northeast. However, resales declined by 1.4 percent in the western United States.
Price Resilience Amid Sluggish Demand
Despite tepid demand, home prices showed resilience in April. The median home price increased by nearly 1 percent year over year. While this pace is slower than the gains observed in the fall, it represents an improvement over the first few months of the year, when price increases were below 0.5 percent annually.
TD Economics noted that sales remain below historical averages. In the Northeast, activity is at its lowest level in decades. However, below-average supply has helped support moderate price growth.
Mortgage Rates and Economic Headwinds
One significant challenge for the housing market is mortgage rates. The average interest rate for a 30-year fixed-rate mortgage in the United States stood at 6.4 percent in April. This elevated level chips away at buyers' purchasing power, according to the TD report.
Further dampening demand is the current economic environment, influenced by unrest in the Middle East. Conflict in Iran has substantially increased energy costs, sparking higher inflation across the economy and eroding buyer budgets.
Overall, while the spring market shows modest growth, the combination of high mortgage rates, geopolitical tensions, and below-average sales activity suggests a cautious outlook for the remainder of the year.
