Existing-home sales in the United States fell 2.4% in April compared to March.
Existing home prices jumped by 14.8% year over a year starting in April, the highest record in the last 3 years. Experts agree that high inflation pressure, high cost of materials, and supply chain issues have affected existing house sales in the U.S.
According to the National Association of Realtors, existing-home sales in April fell to their lowest level since the start of the pandemic in 2019.
The Federal Reserve lifted its interest rate by a total of 75 basis points. There are more talks about multiple interest hikes at the rate of 50 bps. Yet, despite rising interest rates, mortgage rates remained high, and that affected the housing sales process in many ways. According to Lawrence Yon, a chief economist, existing house sales are expected to decline further to lower levels.
The average price for an existing home was about $390,000. The price might vary depending on the state’s real estate market conditions. Yet, compared to last year, that was considered a 14.8% increase. Add to that the complex variation that affects housing market prices, such as building material costs and the world’s tight supply chain.
By digging deeper through the numbers, we have found that compared to March sales, house sales declined by 2.4%. From March to April, the 3 year fixed mortgage rates increased at a fast pace that was alarming for the majority of the experts. In March, the 30-year fixed mortgage rate was 3.66%, and now it has jumped to 5.45%. On top of that, it’s expected to be 6% by the end of this month.
The national association of Realtors had made an extensive comparison between April 2022 data and April 2021 fugues, and the results were as follows:
Existing home sales in a price range of $100.000 to $250.000 were down by 29%. by the end of April 2022. Yet, high-end house prices above $500.000 jumped by 9%, which was refreshing to the department. Still, inventory declined by 10.4% a year over year to settle at 1.03 million houses for sale.
U.S. buyers remain cautious during these hard times, especially when the S&P is heading deep and closer into correction territory, according to Thursday’s reports.
The S&P 500 fell in the early hours of Thursday, during a period when investors are increasingly selling stocks. The fears of more aggressive interest hikes have put massive pressure on the Wall Street benchmark and the housing market.
Investors are now trying to more safely invest their money to ensure their money isn’t threatened by the market’s ups and downs.
As of today, the S&P benchmark has in some ways confirmed that it’s inched closer to a bear market, and if things keep in that trend, it will soon be obliged to get into a correction.
On Thursday morning the S&P index fell by 0.9% conforming to a seventh week straight of losses, making it one of the worst first quarters in the index’s history.