Home Sales Haven’t Been This Slow Since the Great Recession
The housing market in April saw a decrease in existing home sales, attributed to concerns over tariff-related uncertainty impacting the spring housing season. The National Association of Realtors reported a 0.5% drop in existing home sales to a seasonally adjusted rate of 4 million, marking the slowest pace for April since 2009 and a 2% decline compared to the previous year.
Consumer confidence was already shaky when President Donald Trump announced reciprocal tariffs on imports from all countries in April. Although most of these tariffs were suspended for 90 days, the initial announcement caused market turbulence and heightened economic concerns.
According to Danielle Hale, chief economist of Realtor.com, the April home sales likely went under contract in March and early April when mortgage rates were stable. However, consumer concerns about personal finances and job security may have deterred potential buyers from making large purchases like homes.
In recent weeks, mortgage rates have slightly increased, raising affordability concerns for buyers. The average 30-year fixed mortgage rate stood at 6.86% as of May 22, up from the previous week but lower than the rate recorded a year ago.
Despite the sluggish market, there is a silver lining for buyers as the inventory of existing homes listed for sale increased by 9% from March and 20.8% from the previous year to 1.45 million units in April. This growth in inventory could stabilize home prices and provide more options for buyers.
The median home price nationwide rose by 1.8% from the previous year to $414,000 in April, marking the 22nd consecutive month of year-over-year price increases. While prices fell in the South and West regions, they rose in the Northeast and Midwest.
Looking ahead, Hale mentioned that mortgage rates are expected to remain within a range that could potentially dampen home sales in the short term rather than boost them.
In conclusion, the housing market continues to face challenges due to economic uncertainties, but the increase in inventory and stable home prices offer some relief for buyers. With mortgage rates playing a crucial role in affordability, the market outlook remains cautious for the near future.
