Hat Tip ChiFi! (No, not this post, but the last two).
US home sales fell in April for the second month in a row and home prices had the biggest drop since 2012, according to a National Association of Realtors report released Thursday.
Sales had shown some life, rising in February after a full year of declines due to surging mortgage rates, but that momentum has since cooled.
In April, sales of existing homes — which include single-family homes, townhomes, condominiums and co-ops — dropped 3.4% from March. Annually, sales were down 23% from a year ago and the seasonally adjusted annualized sales pace dropped from 5.57 million units a year ago to 4.28 million in April.
April’s falling sales showed that February’s reversal — which ended the longest streak of month-to-month declining home sales on record, going back to 1999 for all homes — did not take off. Mortgage rates were rising in February and pushing toward 7% in March when many of these April closings went into contract.
“Home sales are bouncing back and forth but remain above recent cyclical lows,” said Lawrence Yun, NAR’s chief economist. “The combination of job gains, limited inventory and fluctuating mortgage rates over the last several months have created an environment of push-pull housing demand.”
This sales pace is higher than the end of last year, when sales hit a low for this cycle of 4 million units. But the current sales pace is down 33% from the cyclical peak of a 6.34 million unit pace in January 2022.
While all four major regions of the US registered both monthly and annual drops in sales, drops continue to be bigger in areas that are highest cost and saw the biggest run up in prices over the past few years.
Sales in the Northeast and the Midwest were both down 1.9% from March, while sales in the South decreased 3.4% and sales in the West were down 6.1% from the previous month. On an annual basis, sales in the West are down a whopping 31%.