• Existing homes sales fell by 1.9% in April to a seasonally adjusted annual rate (SAAR) of 4.14M and are now down 1.9% from April 2023, according to the National Association of Realtors (NAR). This is a slight improvement from being down 3.7% year-over-year in March.
• Total housing inventory at the end of April increased to 1.21 million units from 1.11 million units in March, up 16.3% from a year ago.
• The median existing-home sales price in April was $407,600, 5.7% higher than a year ago.

What happened: After falling in March, existing home sales fell again in April mostly due to a sudden and rapid surge in mortgage rates. Looking ahead, mortgage rates have fallen almost 40 bps since, potentially supporting a rebound in May.

What Zillow Senior Economist Orphe Divounguy thinks: Last year, buyers returned to the housing market ahead of the spring season, but many sellers opted to stay on the sidelines. This year, more sellers are back well ahead of the spring shopping season. However, buyers – faced with a sharp increase in mortgage rates – have been slower to return.

Because sellers are returning to the housing market, the gap between supply and demand is closing and for-sale inventory is rising again. Unsold inventory sits at just 3.5-month supply compared to 3.0 months in April 2023. 

Although higher inventory points to the potential for more price cuts and easing price growth, well-marketed and competitively priced listings are selling fast and prices are still rising. According to Zillow data, homes that sold did so in just 13 days – faster than the pre-pandemic norm of 21 days.

The lack of existing homes on the market provides an opportunity for builders to fill the gap, and many are offering incentives such as rate buy-downs to get buyers past the mortgage rate hurdle, making the math work for prospective buyers.