U.S. existing home sales fall for third straight month; house prices at record high

div classBodysc17zpet90 cdBBJodivpWASHINGTON Reuters – U.S. existing home sales dropped to the lowest level in nearly two years in April as house prices jumped to a record high amid a persistent lack of inventory.p

pExisting home sales fell 2.4 to a seasonally adjusted annual rate of 5.61 million units last month, the lowest level since June 2020 when sales were rebounding from the COVID19 lockdown slump. It was the third straight monthly sales decline. pdivdivdiv classBodysc17zpet90 cdBBJodiv

pEconomists polled by Reuters had forecast sales declining to a rate of 5.65 million units. Sales rose in the Northeast and Midwest, but fell in the South and West. p

pHome resales, which account for the bulk of U.S. home sales, declined 5.9 on a yearonyear basis.p

pThe bulk of Aprils sales were likely closings on contracts signed one to two months ago before mortgage rates started their rapid ascent. A further decline in sales is likely as contracts decreased for the fifth straight month in March. p

pThe 30year fixedrate mortgage averaged 5.30 during the week ended May 12, the highest since July 2009, according to data from mortgage finance agency Freddie Mac. It has increased by more than 100 basis points since midMarch when the Federal Reserve started raising interest rates to cool domestic demand and bring down high inflation.p

pThe median existing house price shot up 14.8 from a year earlier to an alltime 391,200 in April. The median house price surged 22 in the South, which had seen a rapid rise in sales as Americans moved from other regions.p

pSales remained concentrated in the upperprice end of the market amid a paucity of entrylevel houses. p

pThere were 1.03 million previously owned homes on the market, down 10.4 from a year ago. p

pSupply is likely to remain tight. The government reported on Wednesday that building permits for singlefamily housing, the largest segment of the housing market, tumbled to a sixmonth low in April. p

pAt Aprils sales pace, it would take 2.2 months to exhaust the current inventory of existing homes, down from 2.3 months a year ago. A sixtosevenmonth supply is viewed as a healthy balance between supply and demand. p

pProperties typically remained on the market for 17 days, unchanged from the prior month and a year ago. Eightyeight percent of homes sold in April were on the market for less than a month. Firsttime buyers accounted for 28 of sales. Allcash sales made up 26 of transactions.p

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pp Reporting by Lucia Mutikani Editing by Dan Burnsp

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