Subscribe to TRD Data to unlock this content
Fueled by tempered price growth, the South is leading the country for existing home sales.
Across the U.S., there were just over 4 million existing homes sold in April, up 0.2 percent flat from the month prior and unchanged from the year before, according to a new release from the National Association of Realtors.
Though consumer confidence and the stock market are up, and mortgage rates have fallen over the past year, buyers appear to be still taking their time before purchasing homes, according to NAR. Prices also continue to climb, as the median sale price for existing homes rose 0.9 percent year over year to $417,700 in April. That was the 34th straight month of annual increases.
This ran counter to the median price of newly built home sales, which fell 6.2 percent year over year to $409,000 in March, according to the U.S. Census Bureau and the Department of Housing and Urban Development. Much of the newly built homes are in the South, where prices are cheaper, bringing down the national figure, said Joel Berner, senior economist with Realtor.com.
“Now we’ve got a pretty big gap with the existing home sales price being a lot higher than the new home sales price,” Berner said. “That’s just a funny result that you wouldn’t expect to see most of the time.”
The South was also the region that recorded the most meaningful year-over-year growth, of 2.7 percent; month over month, sales rose just 0.5 percent. While affordability improved across all regions in April, the South had the second-highest improvement in affordability, of 9.6 percent, according to NAR’s Housing Affordability Index, which measures whether a typical family earns enough income to qualify for a mortgage on a typical home.
The South also had the weakest growth in median sales price among the regions, of just 0.4 percent year over year. That was also lower than the national increase, which came in at 0.9 percent over the same period.
While many Sun Belt markets are contending with moderating prices and rising ownership costs following the pandemic boom-buying years, supply and pricing in the region’s top markets are entering a more balanced territory, experts have said. Meanwhile, micro-markets outside major Sun Belt hubs are on the rise, mainly because of strong job opportunities.
“This post-pandemic recovery is happening in waves in different parts of the country,” said Berner. “The markets that were most impacted during COVID were the Sun Belt markets in your Floridas and your Texases, where prices shot up, and then now we’re seeing a lot more softness as they’ve come down.”
Meanwhile, the Midwest reported the greatest increase in deals month over month, of 2.2 percent, underscoring the region’s attraction from younger buyers who are drawn to the Midwest’s space and improved affordability conditions.
The Midwest has been a leader of late for new residential construction as well, as homebuilding tapers off in other, heavily supplied and space-constrained parts of the country. In March, private housing starts rose 2.4 percent year over year in the Midwest, while they were down by 7.4 percent for the country overall. They had also risen in the West, by 2.2 percent.
At the other end of the spectrum was the Northeast, which continually struggles with land and permit-approving constraints. Existing home sales in the region plunged by 8.2 percent year over year in April, per NAR, while the median sales price grew the most among the regions, by near 5 percent