As Home Prices Continue to Climb, Sales Are Slowing
May 21, 2021
Prices of existing homes grew in April at the fastest pace ever recorded in data going back to 1999. The median existing-home price jumped 19.1% in April as compared to a year prior, climbing to $341,600.
Home sales have boomed in the last year as historically low mortgage rates and millennials entering their prime homebuying years have spurred strong demand. This demand, coupled with low inventory, has sent prices soaring.
This red hot market may finally be starting to cool off. Existing-home sales fell 2.7% in April from the month before. Economists surveyed by the Wall Street Journal had expected sales to increase by 0.2%. This marks the third consecutive month that existing-home sales have declined.
Some of this is likely due to prospective buyers being priced out, but inventory shortages probably play a larger role, as even at record high prices, buyers remain eager to snap up any available homes. In April, the average home sold spent just 17 days on the market, the fastest pace on record according to the National Association of Realtors.