April 2022 Existing Home Sales:
What Happened This Month:
Existing home sales slipped again in April, dropping 2.4% in the month and 5.9% from last year to a pace of 5.61 million, as the housing market continues to settle from the past 18 months of fast and furious activity. Regionally, April home sales increased in the Northeast and Midwest, but were offset by larger sales declines in the South and West. From a year ago, home sales were lower in all four regions. Rising mortgage rates, which first crossed the 5% threshold in April, have kept climbing as the Fed adjusts monetary policy to a less accommodative posture. While higher rates are expected to eventually reign in price increases, typical home sale prices grew 14.8% in April as buyers felt pressure on their budgets and urgency to move quickly.
Young Households Find it Harder to Become Homeowners:
The number of households interested in becoming homeowners remains high, despite waning confidence that now is a good time to buy. This is especially true among younger home shoppers, who are likely to be first-time buyers and are struggling to save for a down payment as rents continue to hit records, as seen in the dip in first-time buyers to 28% in April. At the same time, seller expectations for higher down payments seem to be rising, fueled by a still-competitive housing market and repeat buyers with relatively more equity at their disposal.
What’s Ahead for Homebuyers, Sellers, and the Market:
Homeowners considering a sale this year still hold most of the cards, but will want to keep on top of a rapidly-adjusting market poised for a reset – a real estate refresh. Realtor.com housing data shows that there were fewer homes actively for sale in April than in the year prior, but by the first week of May, the trend flattened. In the most recent weekly data, we saw the biggest yearly jump in active listings since March 2019, as more homeowners decided to sell and more searchers decided to hit pause. The combination of these trends means home shoppers – at least those who can navigate higher mortgage rates and monthly payments – will have more homes to choose from relative to last year, even as options are fewer than before the pandemic..