A housing development in Middlesex, Pa., is shown on March 29, 2024. The National Association of Realtors reports on existing home sales for April on Wednesday, May 22, 2024. (AP Photo/Gene J. Puskar, File)
WASHINGTON — High mortgage rates and rising prices continued to put a damper on the spring homebuying season last month.
Existing home sales fell 1.9 percent to a seasonally adjusted annual rate of 4.14 million in April from a revised 4.22 million in March, the National Association of Realtors reported Wednesday. Sales dropped across the country — down 4 percent in the Northeast, 2.6 percent in the West, 1.6 percent in the South, and 1 percent in the Midwest.
The median price of previously occupied homes rose 5.7 percent to $407,600 — the tenth straight increase and a record for April.
Lawrence Yun, the association’s chief economist, called the sales drop “a little frustrating.” Economists had expected sales to come in at 4.2 million.
The rate on the benchmark 30-year, fixed-rate loan has risen five of the last six weeks and stands at 7.02 percent, up from 6.39 percent a year ago. Would-be homebuyers are also deterred by the high prices, caused partly by a tight inventory of available homes.
READ: More homes are on the market than a year ago
The supply of homes rose 9 percent from March to 1.2 million — the fourth straight increase — but remains low: It was running at 1.7 million before the pandemic.
Relief to housing market seen
Homeowners have hesitated to put their houses on the market partly because they don’t want to give up existing mortgages at low interest rates and buy new homes at higher rates.
The housing market could get some relief if the Federal Reserve cuts interest rates later this year.
“Normally at this time of year we’d see a surge in home sales, but mortgage rates continue to depress listings and buying,” said Robert Frick, an economist at the Navy Federal Credit Union.
“And unfortunately, prices continue to rise, further pushing the opportunity away from lower-income, and even middle-income Americans. The only real relief to the situation will come from the Fed cutting rates later this year, which will eventually filter through to mortgage rates.”
Sales were brisker at the high end of the market. Homes priced at $1 million or more shot up 40 percent from a year ago, partly because inventories of those homes surged 34 percent.
A third of sales went to first-time buyers, the highest share since January 2021, but still below the 40 percent they’ve accounted for historically.