Home Sales Whacked by Mortgage Rates. Active Listings & Price Reductions Jump to Highest in Years. But Sales of High-End Homes Surge by Wolf Richter for WOLF STREET
• May 22, 2024

Sales of existing homes of all types were still dogged by the 7% mortgage rates, but a shift has been taking place that took amplitude in April: Many more higher-end homes came on the market and sold, while fewer mid-range homes sold. This shift impacted all kinds of metrics, from inventory for sale to the median price.

So the seasonally adjusted annual rate of sales of single-family houses, townhouses, condos, and co-ops fell by 1.9% in April from March, to an annual rate of 4.14 million homes. Compared to the Aprils in prior years:

• April 2023: -1.9%

• April 2022: -25.7%

• April 2021: -30.5%

• April 2019: -20.8%

• April 2018: -23.8%.

The seasonally adjusted annual rate of sales late last year had been the lowest since the depth of the Housing Bust in 2010: (historic data via YCharts)

The entire housing market has shrunk by about 20% because a large portion of homeowners with 3% mortgages are neither buying nor selling, they’re just sitting tight and have vanished as demand, and have vanished in equal number as supply, and so sales and supply are down in equal measure, and the churn is down. Realtors make money off the churn, coming and going, and for Realtors, this situation adds another layer of problems to their livelihood.

The average 30-year fixed mortgage rate was above 7% in the latest reporting week, according to the Mortgage Bankers Association today

Active listings have been surging, as new listings are coming on the market amid slow sales. In April, active listings rose to 734,000, the highest level since before the pandemic, and up by over 30% from a year ago, according to data from Realtor.com. Compared to April in prior years:

• April 2023: +30.4%

• April 2022: +93.3%

• April 2021: +68.6%

• April 2019: -35.4%

• April 2018: -33.3%

New listings rose by 9.2% from the prior month and by 12.2% from a year ago, to 432,000. This recovery of new listings and the sharp drop in demand has been fueling the continued rise of active listings, in a market where demand and supply both have shrunk by about 20% as many of the 3% mortgage holders have vanished from the market as buyers and as sellers (data via Realtor.com)

Price reductions jumped to 34% of active listings, the highest for any April in the data released by Realtor.com going back through 2017, as sellers are grappling with their aspirational prices and reality

Supply jumped to 3.5 months, the highest for any April since 2020, as inventory for sale rose 16% year-over-year, to 1.21 million homes, while sales were down by 1.9% from April 2023, and by 20% to 30% from Aprils in earlier years, according to NAR data.

Days on the market – until the home is either sold or pulled off the market – followed seasonal patterns and declined to 47 days in April, but that was the longest for any April since 2020.