Home sales are down as buyers struggle to find a home they can afford.
number sale of existing houses declining for three months in a row. In April, annual sales on a seasonally adjusted basis were 5.85 million, down 2.7% from March. Sales newly built houses fell even more and unfinished home sales, which measures pre-sales contracts, indicated that May will also see a decline when the numbers are released later this month.
Meanwhile, the average current selling price rose 19.1% year-on-year to $ 341,600 in April, for the ninth straight month of double-digit price increases. Housing prices have been on the rise since last summer as record low mortgage rates have boosted consumer demand, but high prices may finally take their toll.
“In general, low availability reduces the number of buyers in the market and should slow sales,” says Ralph McLaughlin, chief economist at a real estate investment startup. Haus… “The latest data – showing a decline in mortgage applications and a slowdown in home sales – suggests that demand may decline.”
It’s still a seller’s market
Despite the recent downturn, sales are still growing compared to last year. Incomplete sales are almost 52% higher than in April 2020, while secondary home sales are up 34%. The year-on-year comparison is skewed because the real estate market was at bottom in April due to pandemic restrictions, but it shows how good the past year has been for sellers.
According to an online broker, 72% of all offers were involved in a trade war in April. Redfin… A home in D.C. recently had 88 offers – almost all cash. Increased competition has resulted in most homes selling for thousands of dollars. above asking price…
“The market has a very, very long way to go before stock levels start pushing it towards a buyer’s market,” McLaughlin says.
McLaughlin and other experts don’t expect housing prices will fall in the near future, as there will still be more people interested in buying a home than the stock on hand. But in the end, prices should come down closer to income growth and stabilize at more reasonable growth rates of 4% to 5% per year, he says.
At the end of April, total inventory stood at 1.16 million homes – a 2.4-month supply at current sales rates. That’s up 10.5% from March, but still well below the 6-month figure that economists consider healthy.
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Buyers must be prepared – and patient
If you are considering buying a home this year, be prepared to be patient. The competition for affordable homes is still fierce, but as the supply dwindles, there may be more buying opportunities.
McLaughlin recommends that you build everything you need to buy a home in advance. This includes finding the right lender, real estate agent, home inspector, and title company. Pre-approval for the mortgage is required.
And if this year you don’t find your dream home, don’t be discouraged.
“There is no shame in waiting until next year when stock levels can be more reasonable and the pace of the market slower,” McLaughlin says.
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