BAM Key Details:
- A new NAR report shows April existing home sales have dropped month over month by 3.4% and year over year by 23.2%.
- Inventory of unsold existing homes grew 7.2% month over month to 1.04M—equal to 2.9 months’ supply at the current monthly sales pace.
- The NAR report relies heavily on median sale prices, while KCM founder Steve Harney points out how misleading those numbers can be, especially in today’s market.
National Association of Realtors® (NAR) released its latest report showing existing home sales for April have dropped 3.4% from the previous month to a seasonally adjusted annual pace of 4.28 million.
Sales also declined annually by 23.2%, falling from 5.57 million one year ago. All four U.S. regions saw monthly and annual sales decline.
Sales data includes single-family homes, townhomes, condos, and co-ops.
According to the report, median existing home sales also fell, dropping 1.7% year over year to $388,800. Meanwhile, by the end of April, inventory of unsold existing homes had grown 7.2% month over month to 1.04 million—equal to 2.9 months’ supply at today’s monthly sale pace.
Home sales are bouncing back and forth but remain above recent cyclical lows. The combination of job gains, limited inventory and fluctuating mortgage rates over the last several months have created an environment of push-pull housing demand.
Here’s what KCM founder Steve Harney has to say about NAR’s report—and specifically those propagating inaccurate assessments of the housing market:
Here’s my take on NAR's latest Existing Home Sales Report (released this morning). I did the math.— Steve Harney (@SteveHarney) May 18, 2023
11,726 houses sell a day. (4.28M divided by 365 days)
Which means 488 sell an hour.
Which means over 8 sell a minute.
The next time someone spends 10 minutes ranting about how…
Key housing market indicators for April 2023
Here are the latest housing market indicators for April, excluding median sale prices:
- Days on market for the typical home was 22 days in April, dropping from 29 days the previous month but up from 17 days in April 2022. Seventy-three percent of existing homes sold in April spend less than a month on the market.
- First-time buyers accounted for 29% of April home sales, up from 28% in both March of this year and from April 2022. According to NAR’s 2022 Profile of Home Buyers and Sellers (released in November 2022), the annual share of first-time home buyers was 26%, the lowest on record.
- All-cash sales accounted for 28% of April home purchases, up from 27% in March and 26% in April 2022.
- Individual investors or second-home buyers, who are responsible for many of those all-cash sales, bought 17% of the homes sold in April, identical to the previous month and to April 2022.
- Distressed sales, foreclosures, and short sales, unchanged from March and from April 2022, accounted for 1% of home sales in April.
- The 30-year fixed-rate mortgage, according to Freddie Mac, averaged 6.35% as of May 11—down from 6.39% the previous week but up from 5.30% a year ago.
- Total housing inventory, at the end of April, was 1.04 million units—up 7.2% from March and 1.0% from April 2022 (1.03 million).
- Unsold inventory, at the current sales pace, is equivalent to a 2.9 months’ supply—up from 2.6 months in March and 2.2 months one year ago.
Single-family and condo/co-op sales
April’s single-family home sales slid to a seasonally adjusted annual pace of 3.85 million—down 3.5% month-over-month from 3.99 million and down 22.4% from April 2022. The median existing single-family home price dropped 2.1% year over year to $393,000.
Existing condo and co-op sales fell 2.3% month over month to a seasonally adjusted annual pace of 430,000 units; sales also declined 29.5% from April 2022. The median existing condo price rose 0.7% year over year to $348,000.
NAR’s regional breakdown: sales and median home prices
Existing-home sales in the Northeast declined month over month by 1.9% to an annual pace of 510,000—down from 23.9% one year ago (April 2022). The median home price in the Northeast climbed 2.8% year over year to $422,700.
In the Midwest, existing-home sales fell 1.9% month over month to an annual rate of 1.02 million—down 21.5% from April 2022. The median home price in the Midwest rose 1.8% year over year to $287,300.
Existing-home sales in the South dropped 3.4% month over month to an annual rate of 1.98 million—a 20.2% decline from April 2022. The median home price in the South fell 0.6% year over year to $357,900.
In the West, existing-home sales declined month over month by 6.1% to an annual rate of 770,000—slipping 31.3% from April 2022. The median home price in the West dropped 8.0% year over year to $578,200.
Median sale price—and why this metric is almost worthless in today’s market
In April, the median existing-home price for all housing types (single-family, condo, townhouse, co-op) was $388,000—down 1.7% from one year ago ($395,500).
Home prices increased in the Northeast and Midwest but fell in the South and West.
Roughly half of the country is experiencing price gains. Even in markets with lower prices, primarily the expensive West region, multiple-offer situations have returned in the spring buying season following the calmer winter market. Distressed and forced property sales are virtually nonexistent.
While the NAR report relies heavily on median home prices, KCM founder Steve Harney has been busy on Twitter pointing out how misleading those numbers can be, especially in today’s market:
In a market like this, median values are almost worthless. As evidence, I give you the Center for Real Studies at Wichita State University’s analysis of median sales prices:— Steve Harney (@SteveHarney) May 18, 2023
“The median sale price measures the ‘middle’ price of homes that sold, meaning that half of the homes…
Takeaways for real estate agents
Sales numbers and median prices—both nationwide and regional—can be widely different from what you’re seeing in your local market. All the more reason for you to stay educated and up-to-date on your local market data, so you can share that with your clients and community.
Also, keep Steve Harney’s points in mind if anyone asks about median home prices—or if you hear anyone making gloomy assumptions about the housing market. Show them some charts from KCM, Case-Shiller, CoreLogic, etc. to dispel that myth and give them clear, reliable information on what they can expect.
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