High mortgages, few homes lead to annual sales drop
LOS ANGELES >> A persistently low inventory of homes on the market held back U.S. home sales again in April, even as the national median sale price posted its biggest annual drop in 11 years.
Existing home sales fell 3.4% in April from March to a seasonally adjusted annual rate of 4.28 million, the National Association of Realtors said Thursday. That's slightly below what economists were expecting, according to FactSet.
Sales sank 23.2% compared with April last year. The annual drop was steepest in markets across the Western part of the country, where sales plunged more than 30% from a year earlier.
The national median home price slipped 1.7% from April last year to $388,800, the NAR said. While modest, the yearover-year decline is the biggest since January 2012, the tail end of a a multiyear slide in home prices after the mid-2000s housing bubble burst.
The latest housing market figures are more evidence that even with prices easing back after rising for more than a decade many would-be homebuyers remain frustrated by a stubbornly low supply of homes for sale and elevated borrowing costs.
“We have a very strange dynamic,” said Lawrence Yun, the NAR's chief economist. “Sales are down, even prices are down, yet multiple offers are happening on at least one-third of the properties (that) have been sold above their list price.”
The U.S. housing market has yet to emerge from a slump that started a little more than a year ago, when the average rate on a 30-year mortgage began to climb from ultralow levels, eventually doubling to just over 7% by the fall. When mortgage rates rise they can add hundreds of dollars a month in costs for homebuyers on top of already high home prices.
That benchmark home loan rate tends to track the moves in the 10-year Treasury yield, which rose sharply last year as bond investors reacted to the Federal Reserve aggressively hiking its main borrowing rate — the central bank's main tool against four-decade high inflation.