U.S. home sales were flat in April, marking a lackluster continuation of the spring homebuying season. The National Association of Realtors reported that existing home sales remained unchanged from March, as elevated prices and mortgage rates continued to dampen buyer enthusiasm. The median home price rose to $420,800, up 5.7% from a year earlier, while the inventory of homes for sale increased slightly but remained below pre-pandemic levels.
Market Stagnation
Sales of previously owned homes, which account for the majority of the market, were essentially flat compared to March. Economists had expected a modest uptick, but the data revealed that many potential buyers are still priced out of the market. The average 30-year fixed mortgage rate hovered around 7.2%, making monthly payments significantly higher than a few years ago.
Regional Variations
Regionally, the South and West saw slight declines, while the Northeast and Midwest experienced marginal gains. The South, which had been a hot spot for migration, saw a 2% drop in sales, while the Northeast posted a 1% increase. The Midwest and West were essentially unchanged.
Inventory and Pricing
Inventory levels rose 9% from March but were still 15% below the same period in 2024. The months' supply of homes increased to 3.2 months, up from 3.0 months in March, but still below the 6 months that indicate a balanced market. First-time buyers accounted for 32% of sales, down from 34% a year ago.
Outlook
Looking ahead, economists predict that home sales will remain subdued until mortgage rates decline significantly. The Federal Reserve's recent signals that it may cut rates later this year could provide some relief, but for now, the spring market is shaping up to be one of the slowest in recent memory. Builders are also facing headwinds, with new home construction permits falling 3% in April.
