Sales of existing homes fell for a second straight month in April, but the market should rev up soon, the National Association of Realtors (NAR) said on Tuesday.
Home sales dipped 0.4% from March to a seasonally adjusted annual rate of 5.19 million . Sales were down 4.4% from a year ago.
Student debt is still holding back many millennial buyers, says Lawrence Yun, NAR's chief economist. And prices for the entry-level homes that age group targets have risen sharply because of low supplies.
Meanwhile, a big drop in mortgage rates didn’t boost home sales. The average rate for a 30-year, fixed-rate mortgage dropped to 4.14% in April from 4.27% in March, according to Freddie Mac, the mortgage loan company. The average rate in 2018 was 4.54%.
Yun believes sales will pick up later this year.
“We are seeing historically low mortgage rates combined with a pent-up demand to buy, so buyers will look to take advantage of these conditions,” Yun says.
“Also, job creation is improving, causing wage growth to align with home price growth, which helps affordability and will help spur more home sales," Yun added.
The median sale price last month was $267,399, up 3.6% from a year ago. April’s increase marks the 86th straight month of year-over-year gains.
Home sales fell 4.5% in the Northeast and 0.4% in the South. Sales grew 1.8% in the West and were flat in the Midwest.
Housing supplies are rising but remain below normal levels. The inventory of existing homes for sale increased 1.7% to 1.83 million.
“Despite today’s slip, home sales this spring and summer will likely keep pace with last year as a result of increased availability of homes for sale and the lower mortgage rates that are expected to prevail in the second half of the year," said Danielle Hale, chief economist for realtor.com.