Spring homebuying season is shaping up as another bust

The American dream of homeownership is still alive. It just has a 6.37% mortgage rate and requires giving up brunch indefinitely.

So far this spring, existing-home sales in the US are hovering near a three-decade low for the fourth straight year, with many prospective homebuyers staying put due to lack of affordability.

By the numbers: Sales of existing US homes rose just 0.2% in April to reach a seasonally adjusted annual rate of 4.02 million, per the National Association of Realtors (NAR).

That figure fell well short of economists’ expectations for a 3% jump. The overall sales number is also far short of the historic norm for spring, which is closer to an annual rate of 5.2 million homes sold.

The disappointing data came despite home inventory finally improving last month.

• There were 1.47 million unsold homes on the market at the end of April, up 5.8% from March and the highest April inventory level since 2019.
• But that’s still below the ~2 million homes for sale that was typical before the Covid pandemic.

Driving the trend

Many would-be homebuyers say they’re turned off by still-high home prices and mortgage rates.

• The national median existing-home price reached $417,700 in April, up 0.9% from a year earlier and the highest median home price ever recorded for the month of April, per NAR.
• And while mortgage rates briefly dipped below 6% in late February, they’ve since climbed back to 6.37%—as of last week—amid heightened inflation concerns.

Other prospective buyers are hesitant to lock themselves into a major purchase amid lingering concerns about the job market and overall US economy.

Looking ahead: Mortgage rates will likely determine whether the housing market can break out of its funk later this year, WSFS Home Lending President Jeffrey Ruben told the WSJ. Rates falling back below 6% could help revive demand, but climbing above 6.5% could spook more buyers out of the market.