The number of sales of previously owned homes in the country dropped in April thanks to factors including low inventory, rising prices and higher mortgage rates.
The National Association of Realtors found that sales of existing homes dropped 2.5 percent from the prior month in April, hitting a seasonally adjusted annual rate of 5.46 million, according to the Wall Street Journal. Year over year, sales dropped by 1.4 percent, while the median sale price went up by 5.3 percent, hitting $257,900.
Spring typically sees 40 percent of U.S. home sales, but the season has started off slow this year, reflecting increased pressure on buyers. Despite the strong economy, home prices are still rising roughly twice as much as incomes.
Mortgage rates have also been going up this year, so far rising in 15 out of 21 weeks. This week, rates for 30-year mortgages hit 4.66 percent, up from 3.99 percent at the end of 2017, according to Freddie Mac.
Sales dropped throughout the country in the Northeast, the South and the West, but economists still think existing home sales will slightly increase this year thanks to economic growth.
“This is going to be the peak year for sales in this cycle,” Nationwide Insurance chief economist David Berson told the Journal. [WSJ] – Eddie Small