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PNC Senior Economist Abbey Omodunbi: Existing-Home Sales Fall to Lowest Level Since June 2020

Michigan Business Network
May 19, 2022 1:00 PM

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as Rising Mortgage Rates Weigh on Housing Activity

  • Sales of existing homes fell 2.4% to 5.61 million annualized units in April from the prior month, the lowest level since June 2020.
  • The inventory of unsold existing homes in April improved slightly to 1.03 million from 950,000 in March.
  • Sales of existing homes were down on a year-over-year basis in each of the four major U.S. regions.
  • Affordability will erode further as mortgage rates rise, resulting in slower housing activity through 2020

Sales of existing homes fell 2.4% in April to 5.61 million annualized units, the lowest level since June 2020, according to the National Association of Realtors. This means 5.61 million units would be sold in 2022 if sales were at the same pace as they were in April. Existing-home sales fell on the month in the South and the West while sales rose in the Northeast and the Midwest. Existing-home sales were down on a year-over-year basis in each of the four major regions. 

On a year-ago basis, total existing-home sales were down 5.9% in April; sales of single-family homes were down 4.8% while sales of condos and co-ops tumbled 13.9%. The median existing-home selling price for all house types in April was $391,200, up 14.8% from April 2021 ($340,700). The median existing single-family home price was $397,600 in April, up 14,8% from April 2021. The median existing condo price was $340,000 in April, an annual increase of 13.1%. The months’ supply of existing homes for sale was 2.2 months in April at the current sales pace, slightly up from 1.9 months in March. Properties typically remained on the market for 17 days in April, equal to both the number of days in March 2022 and April 2021. Twenty-eight percent of buyers were first-time buyers, down from 31% a year ago. 

Existing-home sales declined for the third consecutive month as rising mortgage rates and lean inventories weighed on housing activity. Housing inventory was low coming into the pandemic after many years of underbuilding following the Great Recession. But homebuilders have struggled with inflation, supply-chain disruptions, and labor constraints in the past year, putting downward pressure on the inventory of unsold existing homes. Demand has softened as mortgage rates have risen sharply this year. Affordability will erode further as mortgage rates rise, resulting in slower housing activity through 2022.

The PNC Financial Services Group, Inc. is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. For information about PNC, visit www.pnc.com.

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