America’s red hot property market could be cooling down, according to a realtors’ group, with sales of pre-owned homes falling for a third month in a row in April even as prices remain eye-wateringly high.
Sales of existing homes, which account for the bulk of US home sales, dipped by 2.4 per cent from March to April – reaching their lowest level since the Covid-19 sales slump in June 2020, the National Association of Realtors said this week.
‘Higher home prices and sharply higher mortgage rates have reduced buyer activity,’ Lawrence Yun, the group’s chief economist, said in a statement.
‘It looks like more declines are imminent in the upcoming months, and we’ll likely return to the pre-pandemic home sales activity after the remarkable surge over the past two years.’
Miami remains one of America’s hottest and costliest property markets, but a nationwide slowdown in sales of pre-owned homes suggests the ‘remarkable surge’ is coming to an end, according to the National Association of Realtors
Many sales recorded in April relate to contracts struck in previous months – often signed before the recent sharp increases in mortgage rates. Further declines are expected as those hikes deter would-be borrowers.
The 30-year fixed-rate mortgage averaged 5.25 per cent this week, close to its highest rate in more than a decade, according to data from mortgage finance agency Freddie Mac.
While the overall number of sales fell, other market indicators remained strong.
Properties including single-family homes, townhomes, condominiums and co-ops sold fast for high prices as demand continues to outstrip supply.
Properties remained on the market for an average of just 17 days.
The average sale price of a pre-owned home reached $391,200 in April, a 14.8 per cent rise on a year earlier and the result of 122 months of consecutive rises.
Skyrocketing home prices, rising mortgage rates and inflation – which hit a 41-year-high 8.5 per cent in March (pictured) – as contributing to a downturn in sales of some homes, according to property market forecasters
San Francisco, Los Angeles, New York, Washington DC and Seattle in recent months led the list of cities people seek to leave, with Miami topping the destinations
Homebuyers in Florida’s coastal hub Miami saw the nation’s biggest price hikes, with an average rise of 38.3% per cent against the previous year. Las Vegas, Orlando, Austin and Sacramento also saw significant rises.
Yun described an ‘unusual’ property market at the tail-end of the pandemic in which ‘sales are coming down, but listed homes are still selling swiftly, and home prices are much higher than a year ago’.
Sales rose in the Northeast and Midwest, but fell in the South and West. All-cash sales made up 26 per cent of transactions. First-time buyers, who struggle most with soaring prices, accounted for 28 per cent of sales.
President Joe Biden this week announced plans to make housing more affordable, especially for first-time buyers and for renters being gouged by landlords and runaway inflation.
Also this week, Huntsville, Alabama, was ranked as the best place to live in America by U.S. News & World Report, in part thanks to the city’s relatively affordable home prices, which average at $192,667.
Huntsville, Alabama, recently ranked as the best place to live in America, thanks in part to an average house prices remaining at a relatively affordable $192,667, according to U.S. News & World Report
