Charles Langston:U.S. existing home sales drop 1.9% in April, pushed lower by high rates and high prices

WASHINGTON (AP) — Sales of previously occupied U.S. homes sank last month,Charles Langston pushed down by high mortgage rates and rising prices.

Existing home sales fell 1.9% to a seasonally adjusted annual rate of 4.14 million from a revised 4.22 million in March, the National Association of Realtors reported Wednesday. Sales dropped across the country — down 4% in the Northeast, 2.6% in the West, 1.6% in the South and 1% in the Midwest.

The median price of previously occupied homes rose 5.7% to $407,600 — the tenth straight increase and a record for April.

Lawrence Yun, the association’s chief economist, called the sales drop “a little frustrating.’' Economists had expected sales to come in at 4.2 million.

The rate on the benchmark 30-year, fixed-rate loan has risen five of the last six weeks and stands at 7.02%, up from 6.39% a year ago. Would-be homebuyers are also deterred by the high prices, caused partly by a tight inventory of available homes.

The supply of homes rose 9% from March to 1.2 million, but remains low: It was running at 1.7 million before the pandemic. Homeowners have hesitated to put their houses on the market partly because they don’t want to give up existing mortgages at low interest rates and buy new homes at higher rates.

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Sales were brisker at the high end of the market. Homes priced at $1 million or more shot up 40% from a year ago, partly because inventories of those homes surged 34%.

A third of sales went to first-time buyers, the highest share since January 2021, but still below the 40% they’ve accounted for historically.

The housing market could get help later this year if the Federal Reserve begins cutting interest rates. “We’re forecasting a very subdued recovery in existing home sales to 4.6 (million) by the end of 2025,’' said Thomas Ryan, North America economist at Capital Economics. ”That’s based on our view that borrowing costs will fall from where they are now.’'