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July 2024
Real Estate Update
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Donna Smith
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Sales Decline Amid Rising Prices and Inventory Growth
Image: Tierney / Adobestock

Existing-home sales fell slightly in April, according to the NAR. Every major sales region in the country recorded month-over-month declines, while every region, except the West, saw sales drop year over year. While the decline in sales was minor, Lawrence Yun, chief economist for the NAR, reported that the upper-end market was experiencing significant gains due to increasing supply.

Housing Inventory Trends

At the end of April, total housing inventory climbed to 1.21 million units, up 9% from a month ago and an impressive 16.3% from a year ago. At the current sales pace, this level of inventory would supply the market for 3.5 months, up from a 3.2-month supply in March and a 3.0-month supply in April 2023. For homes in the upper-end market (priced at $1 million or more), inventory climbed 34% and sales were up 40% year over year.

Slight Shifts in Buyer and Market Dynamics

The average property in April remained on the market for 26 days, according to the Realtors Confidence Index. In comparison, properties were available for 33 days a month ago and 22 days a year ago. The number of first-time buyers in the market, meanwhile, remained strong, with this group accounting for 33% of all transactions in April, up from 32% in March and 29% in April 2023. According to the NAR "2023 Profile of Home Buyers and Sellers,” the annual share of first-time buyers was 32%. All-cash buyers also remained active in the market, representing 28% of the buying public in April, unchanged from both a month ago and a year ago. Individual investors and second-home buyers, who account for many all-cash sales, were responsible for 16% of all purchases in April, up from 15% a month ago and down from 17% a year ago. Distressed sales (including foreclosures and short sales) also remained stable month over month and year over year, representing 2% of sales in April.

Climbing Home Prices

Median prices for existing single-family homes reached record highs in April, climbing to $412,100, up 5.6% from a year ago. Every region in the country posted price gains. According to Yun, this should be welcome news for homeowners; "however, the pace of price increases should taper off since more housing inventory is becoming available.”

Regional Breakdown

Northeast: Existing-home sales annual rate of 480,000; a decrease of 4% from both March 2024 and April 2023. The median sales price of $458,500 represented an 8.5% increase from April 2023.

Midwest: Existing-home sales annual rate of 1 million; a decrease of 1% from both March 2024 and April 2023. The median sales price of $303,600 represented a 6% increase from April 2023.

South: Existing-home sales annual rate of 1.9 million; a decrease of 1.6% from March 2024 and 3.1% from April 2023. The median sales price of $366,200 represented a 3.7% increase from April 2023.

West: Existing-home sales annual rate of 760,000; a decrease of 2.6% from March 2024 but an increase of 1.3% from April 2023. The median sales price of $629,600 represented a 9.3% increase from April 2023.

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