The American housing market remains broken three years later, with no signs of recovery

(SeaPRwire) –   Sales of previously occupied U.S. homes remained nearly unchanged in April, marking another lackluster performance for the housing market during what is typically its busiest season.

Existing home sales rose by just 0.2% from March to a seasonally adjusted annual rate of 4.02 million units, according to data released Monday by the National Association of Realtors. Sales were flat compared to April of the previous year.

The latest sales figure missed economists’ expectations of about 4.12 million units, based on data from FactSet.

Sales have been hovering around the 4-million annual pace since 2023, significantly below the historical norm closer to 5.2 million units.

Meanwhile, U.S. home prices continued to climb nationwide last month, though at a slower pace. The national median sales price increased 0.9% year-over-year in April to $417,700—the highest April price ever recorded, dating back to 1999, NAR reported. Home prices have now risen on an annual basis for 34 consecutive months.

The U.S. housing market has been struggling since 2022, when mortgage rates began rising from pandemic-era lows. Last year, sales of previously occupied homes remained essentially flat, hitting a 30-year low. So far this year, sales have continued to lag, declining compared to the same period in 2023 through the first quarter.

“This spring homebuying season, all the way through April, we can say we are not forecasting any increase compared to one year ago,” said Lawrence Yun, chief economist at NAR.

Inventory shortage continues to weigh on the market

Homes sold in April likely went under contract in February and March, when the average rate on a 30-year fixed mortgage ranged from 5.98%—its lowest level in three and a half years—to 6.38%, according to Freddie Mac. The average rate stood at 6.37% last week.

Although the average rate has stayed lower than it was a year ago, it has been volatile since the start of the war with Iran, as surging energy prices fuel concerns about inflation.

Buyers who can afford to purchase homes are seeing more properties available, but overall inventory levels remain well below historical averages.

At the end of April, there were 1.47 million unsold homes on the market, up 5.8% from March and 1.4% higher than in April of the prior year, NAR noted. This marks the highest number of homes available in April since 2019, when month-end inventory reached 1.83 million.

Still, that figure remains below the roughly 2 million homes typically listed before the onset of the COVID-19 pandemic.

April’s month-end inventory represents a 4.4-month supply at the current sales pace. In a balanced market between buyers and sellers, a 5- to 6-month supply is generally considered normal.

“We really need to see a 30% increase in inventory, but we’re not seeing that happen,” Yun stated.