NAR’s Yun: ‘The Market Is Quite Unusual’

saleswoman greeting female customers while standing outside house

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For the third consecutive month, existing-home sales fell, but buyers are still eager. Higher mortgage rates and prices and low inventory continue to chip away at affordability. Some regions of the U.S., however, continue to see gains.

Nationwide, existing-home sales—completed transactions of single-family homes, townhomes, condos, and co-ops—decreased 2.4% in April compared to March, according to the National Association of REALTORS®’ latest housing report. Sales are down 5.9% year over year.

“The market is quite unusual as sales are coming down, but listed homes are still selling swiftly, and home prices are much higher than a year ago,” says Lawrence Yun, NAR’s chief economist.

Still, higher home prices and sharply higher mortgage rates are beginning to reduce buyer activity in many markets, he adds. “It looks like more declines are imminent in the upcoming months, and we’ll likely return to the pre-pandemic home sales activity after the remarkable surge over the past two months,” Yun says.

Here’s a closer look at the key indicators from NAR’s latest housing report.

  • Home prices: The median existing-home sales price increased at a slower year-over-year pace of 14.8% in April. Median home prices were $391,200 nationwide. Home prices continued to increase in every region of the U.S.
  • Days on the market: Eighty-eight percent of homes sold in April were on the market for less than a month. Properties remained on the market for 17 days in April, the same as last month and as a year ago.
  • First-time buyers: First-time home buyers comprised 28% of sales in April, down from 31% a year ago.
  • Investors and second-home buyers: Individual investors and second-home buyers accounted for 17% of home sales in April, the same as a year ago. These buyers tend to make up the bulk of all-cash sales, which accounted for 26% of transactions in April, also about the same as a year ago. “The cash buyers, not impacted by mortgage rate changes, remain elevated,” Yun says.
  • Distressed sales: Foreclosures and short sales remain historically low, representing less than 1% of sales in April and down from 2% a year earlier.
  • Housing inventory: Total housing inventory is up 10.8% in April compared to March and down 10.4% from a year ago. Unsold inventory sits at a 2.2-month supply at the current sales pace. “Housing supply has started to improve, albeit at an extremely sluggish pace,” Yun says.

Even with some improvement, the nation has a long way to go in reversing years of underbuilding and low inventory, NAR notes. “As we find ourselves in the midst of a massive housing shortage, NAR continues to work with leaders across the private and public sectors to help close this deficit,” says NAR President Leslie Rouda Smith. “As the nation’s largest real estate association, we are urging policymakers to enact zoning reforms, homebuilder incentives, and other necessary regulations to help correct this situation.” The Biden administration made an announcement this week with a proposal to try to improve America’s housing shortfall. Read more: Biden Administration Takes Aim at America’s Housing Shortage

Regional Breakdown

The following is a closer look at how existing-home sales fared across the country in April, according to NAR’s sales report.

  • Northeast: Existing-home sales increased by 1.5% in April, reaching an annual rate of 670,000, a 10.7% drop from a year ago. Median price: $412,100, up 8.1% from April 2021
  • Midwest: Existing-home sales rose by 3.1% from the prior month to an annual rate of 1.31 million in April, a 1.5% decrease from a year ago. Median price: $282,000, an 8.7% increase from one year ago
  • South: Existing-home sales dropped by 4.6% in April, recording an annual rate of 2.49 million, a 5.7% decrease from one year ago. Median price: $352,100, a 22.2% increase from a year earlier. The South is the only region to report year-over-year double-digit price gains.
  • West: Existing-home sales fell by 5.8% in April, reaching an annual rate of 1.14 million, down 8.1% from one year ago. Median price: $523,000, up 4.3% from April 2021
A graphic of existing-home sales data from April 2022.