According to the National Association of Realtors, condo sales were essentially flat in April compared to March, increasing just 0.2% on a seasonally adjusted and annualized basis to 4.02 million units. Real estate analysts expected an increase of more than 3%.
April sales were flat year-over-year. This count is based on contract signings, so contracts were likely signed in late February and March. According to Mortgage News Daily, the average interest rate on 30-year fixed-rate mortgages was in the high 5% range at the end of March and then rose sharply due to the start of the US-Israeli war with Iran.
“Despite mixed macroeconomic signals — including a record-high stock market and historically low consumer confidence — home sales were boosted modestly by continued improvement in housing affordability,” NAR chief economist Lawrence Yun said in a news release. “Mortgage rates are lower than they were a year ago and average income growth is outpacing home price growth.”
Inventories rose 5.8% in April from March, but only increased 1.4% from the previous April to a 4.4-month supply. This is still considered tight because a six-month supply represents an even market between buyers and sellers.
“We really need inventory to grow by 30%, but we’re not seeing that,” Yun said. “Multiple offers still exist, although not as intensely as a few years ago. At the same time, market days are getting longer on average, meaning consumers are taking their time before making decisions.”
That drove prices up. The average price of a home sold in April was $417,700, up 0.9% from a year ago. That’s the highest price NAR has recorded for April.
The average time on market increased to 32 days in April, compared to 29 days in the same month last year. First-time buyers accounted for 33% of sales during the month, a slight decline from last year. A quarter of all sales were made exclusively in cash, unchanged from the previous year.
Mortgage rates continue to be higher, reaching 6.42% this week. Other reports this month show that while pending sales rose slightly in April and May, supply is again tightening. This will further drive up prices.
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