Home News Existing home sales fell in April to lowest level since start of pandemic

Existing home sales fell in April to lowest level since start of pandemic

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The sign sold is outside the house.

Adam Jeffrey | CNBC

Second-hand home sales in April have fallen to their lowest pace since Covid pandemic It has started, according to the National Association of Real Estate Agents.

According to the group, existing home sales fell 2.4% compared to March to a seasonally adjusted annual rate of 5.61 million units. Sales were down 5.9% from April 2021. This is the slowest rate since June 2020 and has been artificially slowed down as it suffered a complete economic outage due to the coronavirus.

This count represents the closing of the month, so it reflects the contracts that may have been signed in February and March when mortgage rates were rising. According to Mortgage News Daily, the average interest rate on 30-year fixed mortgages started at 3.66% in February and ended at 4.78% in March. Currently, it is hovering at around 5.45%.

Lawrence Yun, chief economist at NAR, said, “We are back to pre-pandemic sales activities, but we expect further declines,” and said interest rates are higher than when these contracts were signed. rice field.

Not only did buyers oppose rising interest rates, but they were little relieved about the shortage of sellers. Inventory at the end of April was 1.03 million units, a decrease of 10.4% from April 2021. The current sales pace is 2.2 months.

Despite rising interest rates, housing prices rose due to tight supply. The average price of existing homes sold in April was $ 391,200, a record high, up 14.8% from a year ago.

Its median is more distorted as sales remain strong at the high end of higher supply markets. Home sales from $ 100,000 to $ 250,000 were down 29% year-on-year, while home sales from $ 500,000 to $ 750,000 were up 19%. Home sales over $ 1 million increased 16% compared to a year ago.

Sales continued to be strong as the average answering machine hit the market just 17 days before the deal opened. Full cash sales remained high at 25% of total sales. Investors accounted for 17% of sales and first-time buyers accounted for only 28%. Historically, first-time buyers typically occupy about 40% of the market.

“Despite less confidence that it’s a good time to buy, there are still a large number of households interested in becoming a homeowner. This could be a first-time buyer. This is especially true for young homebuyers who are high and struggling to save down payments. Realtor.com Chief Economist Daniel Hale said: “At the same time, the still competitive home market. It seems that sellers’ expectations for higher down payments are rising, supported by a relatively large number of repeaters who are free to use equity. “

According to the Mortgage Banking Association, new home sales in April will be reported next week, but mortgage applications have fallen by nearly 11% compared to April 2021.

MBA Associate Joel Kang said, “The sharp rise in mortgage rates has cooled demand, and homebuilders have continued to work on rising costs, supply chain problems and extended completion times, so they bought a new home in April. Activity declined on a monthly and annual basis. ” Vice President of Economics and Industry Forecasting.

The MBA predicts that new home sales will decline at the slowest pace since May 2020 for the fifth straight month.

Correction: This story has been updated to reflect that the data is from the National Association of Real Estate Agents.

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