FX168 Financial News (North America) News According to data released by the National Association of Realtors (National Association of Realtors) on Wednesday (May 22), the annual rate of housing transactions fell 1.9% from the previous month to 4.14 million units. This figure is lower than the median value of 4.23 million in Bloomberg's survey of economists.
(Source: Bloomberg)
NAR chief economist Lawrence Yun said in a statement: “Housing prices hit a record high in April, which is good news for homeowners. However, as more housing stocks are emerging, the pace of price increases should gradually slow down.”
Demand began to recover from a 13-year low in October, but was hampered by limited inventory, causing the asking price to remain high. At the beginning of 2021, annualized sales were more than 2 million units higher than the current one, and the mortgage interest rate was about 3%, but now it is 7%.
According to the latest data from the American Mortgage Bankers Association (Mortgage Bankers Association), mortgage interest rates have remained above 7% for the seventh week in a row. Federal Reserve policymakers say they won't rush to lower borrowing costs until inflation gets close to the target.
Yun said inventory has risen slightly in recent months because some sellers don't think they can delay moving any longer. Still, it's still far below pre-pandemic levels. In April, the second-hand housing market supply increased by more than 16% over the same period last year, reaching 1.21 million units.
At the current rate of sales, it would take 3.5 months to sell all the properties on the market. Real estate agents believe any supply below five months indicates a tight market.
sales price
The median sales price rose 5.7% from the same period last year to $407,600, the highest in April data since 1999. Unlike the new housing market, the second-hand housing market is experiencing a year-on-year increase in prices. In the new housing market, increased inventories and general incentives for builders have pushed prices down year over year.
“Unfortunately, prices continue to rise, further depriving low- and even middle-income Americans of opportunity,” said Robert Frick, a corporate economist at Navy Federal Credit Union (Navy Federal Credit Union). “The only thing that can really ease the situation is the Fed's interest rate cut later this year, which will eventually affect mortgage interest rates.”
Of the houses sold, about 68% were on the market for less than a month, up from 60% in March, while more than a quarter sold for a higher price than the listing price.
The NAR report also showed that the average number of days a house was sold on the market in April was 26 days, down from 33 days a month ago, and lower than the typical situation during the spring sales season. Sellers received an average of 3.2 offers.
One reason economists' estimates may be biased is that their predictions are often based on completed sales reports for existing homes measuring contract status. This number increased in February and March.
Yun said that apart from the large sample size in existing home sales reports, signing a contract does not always mean a deal because of factors such as housing inspections, evaluations, and potential issues with mortgage lenders. Buyers are also likely to be hesitant, he said.
Existing home sales account for the majority of homes in the US and are calculated at the end of the contract. The US government will release new home sales data for April on Thursday.