The National Association of Realtors released their Existing Homes Sales Report, which makes up about 90% of all homes on the market, and it showed an easing of 2.4% from March to April. On an annualized basis, existing home sales dropped 5.9%. The data within this report most likely represents contracts from the months of February and March when mortgage rates began rising. According to Mortgage News Daily, average mortgage rates were in the range of 3.66% to 4.78% during February and March. And, they continued to rise afterward into the 5% range of which we will most certainly see its impact in next month’s report.

Also, within the report, we noticed that first-time homebuyers dropped from 30% to 28% of all sales. Cash buyers dropped from 28% to 26% and sales by investors dropped from 18% to 17%. The median home price came in at $391,200 which is around a 15% increase from this time last year. But don’t forget this is the median home price which can be somewhat misleading since sales of homes on the lower end are sharply lower, while sales above $500k are much higher, which pulls the price higher.

Danielle Hale, Chief Economist at Realtor.com, said, “The number of households interested in becoming homeowners remains high, despite waning confidence that now is a good time to buy. This is especially true among younger home shoppers, who are likely to be first-time buyers and are struggling to save for a down payment as rents continue to hit records.”

Even though these numbers came in slightly softer, don’t forget it is in the face of lower housing inventories which are 10% lower than where they were last year, interest rates that have been on the rise, and home prices are almost 20% higher than where they were this time last year. Again, even though this latest existing sales number seems low, it is in fact quite strong when looking at the current dynamic of the market. Almost every outlet that analyzes the housing market is calling for continued appreciation. It may be a softer amount of appreciation, but again home prices are still pointing higher.

Sources:

https://cnb.cx/39BHLyq

http://bit.ly/2MJU6mf

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