The US housing market showed mixed but generally firmer conditions this spring, with sales and prices indexes signaling stronger appreciation.
Existing-home sales rose 0.2% in April from March to a seasonally adjusted annual rate of 4.00 million, according to the National Association of Realtors, although sales were down 1.1% from a year earlier.
“Home sales have been at 75% of normal or pre-pandemic activity for the past three years, even with seven million jobs added to the economy,” said NAR Chief Economist Lawrence Yun. “Pent-up housing demand continues to grow, though not realized. Any meaningful decline in mortgage rates will help release this demand.”
Inventory at the end of April totaled 1.45 million units, up 9% from March and 20.8% from one year ago. That represents a 4.4-month supply at the current sales pace, compared with 3.5 months a year earlier.
NAR’s data show the median existing-home sales price climbed 1.8% from a year earlier to $414,000, the highest price ever recorded for the month of April and the 22nd consecutive month of year-over-year price increases.
Meanwhile, the ICE Home Price Index, also released Monday, showed US home prices rose 0.32% on a seasonally adjusted basis in April, the strongest monthly increase in nearly two years. On an annual basis, home-price growth accelerated to 0.9%.
“Home price growth accelerated in April as softer interest rates raised the ceiling on borrower affordability,” said Andy Walden, Head of Mortgage and Housing Market Research at ICE. “While a 0.32% monthly increase may not sound like much, when annualized, it’s equivalent to home prices appreciating at nearly 4% if sustained over a 12-month period. The key question now is whether that momentum can withstand the recent upward pressure on interest rates heading into the heart of the spring buying season.”
ICE said 90% of markets posted seasonally adjusted price gains in April, the highest share in nearly two years. Seventy of the 100 largest US markets recorded year-over-year increases, with the Northeast accounting for seven of the eight fastest-appreciating markets. All 30 markets with annual declines were located in the South and West.
The latest reports suggest the housing market remains constrained by affordability pressures, but home values continue to rise as improving inventory and earlier declines in mortgage rates support prices across much of the country.
