Housing market remains weak

The housing market failed to gain momentum in April, with home sales barely gaining momentum during the typically busy spring season.

Sales of previously owned homes increased just 0.2% last month, according to the National Association of Realtors (NAR). The modest increase reversed March’s revised 2.9% decline in home sales. But economists had expected a much stronger 3% increase.

Affordability pressure continues
Buying a house is expensive. After dropping below 6% at the end of February, the 30-year mortgage rate kicked back up 6.37% last week due to the war in Iran, fueling buyer worries about inflation.

Even though price growth has slowed compared to last year, homes remain difficult to afford for many households. The national median home price climbed 0.9% from a year earlier to $417,700, marking the highest level ever recorded for April, says NAR.

A sluggish job market is also keeping buyers away, while rising energy costs add pressure on family budgets.

At the same time, the number of homes available for sale increased to 1.47 million, the highest April level since 2019, but still significantly below the pre-pandemic average of 2 million.

Regional trends were mixed. Sales rose in the Midwest and South but fell in the West. First-time buyers made up 33% of purchases, slightly lower than last year. 

What are experts saying
According to analysts, lower mortgage rates could quickly revive demand. Still, many agents and lenders now expect another sluggish year after more than three years of weak sales activity. 

Inventory is improving, but affordability remains a major challenge for buyers nationwide.