Improvements in for-sale supply couldn’t boost April’s existing home sales, which retreated 1.9% month over month to a seasonally adjusted annual rate of 4.14 million units, according to the National Association of Realtors (NAR).
It’s the second straight monthly decline in resales, which saw an expected drop in March presaged by climbing mortgage rates and decreasing mortgage applications. April’s slowdown, however, was more unforeseen, with a Reuters poll of economists forecasting a home sales pickup to a pace of 4.21 million units.
Existing home sales also weakened on an annual basis, falling by 1.9% from April last year.
The dip came even as the supply of listings, which continues to languish amid a persistent inventory shortage, continued a gradual rebound, with several outlets reporting that more homeowners are adjusting to the status quo in interest rates and choosing to list their homes. Total housing inventory at the end of April at 1.21 million units, up 9% from March and 16.3% from April 2023 — though some of that growth stems from the slower sales pace. Unsold inventory at the end of April sat at a supply of 3.5 months at the current sales pace, up from 3.2 months in March and 3.0 months one year prior.
Better supply is positively impacting activity within some segments of the market more than others. Lawrence Yun, chief economist at the NAR, noted that “upper-end market is experiencing a sizable gain due to more supply coming onto the market.” Indeed, for homes priced $1 million of more, inventory and sales jumped year on year by 34% and 40%, respectively.
For the rest of the market, however, high prices and high rates continue to hammer affordability, combining with supply issues to drive buyers to the sidelines en masse. Interest rates eclipsed 7.0% in April, and the median existing home price hit $407,600, a yearly uptick of 5.7%.
“The housing market continues to unthaw slowly amid considerable affordability challenges brought on by high interest rates and rising homeownership expenses,” said Selma Hepp, chief economist at CoreLogic. “Lower mortgage rates later this year will provide a breather, though the average potential homebuyer continues to maintain a wait-and-see approach. Improvements in existing for-sale inventory are critical and will help thaw out sales further.”
Max Slyusarchuk, CEO at A&D Mortgage, called the latest resale figures “disappointing” and said “it’s difficult to feel positive about housing for 2025 overall.”
“Active home listings are up by more than 30%, from a year ago, so that’s a step in the right direction,” he noted. “However, homebuyers are waiting on the sidelines for rates to lower, and the Fed signaled that this won’t happen until September, which is putting a damper on potential home sales.”
