Market Perspective

Home Sales Dip, Prices Keep Climbing


Overview: During a light week for economic reports, what stood out was weaker than expected housing data. As a result, mortgage rates ended the week a little lower.

Existing-home sales, which make up about 90% of the market, have remained at very high levels since bouncing back from the pandemic-related shutdowns last spring. But the pace has slowed a bit over the last few months, mainly due to a lack of inventory in many regions, higher mortgage rates, and severe weather in some areas. In April, existing-home sales unexpectedly fell 3% from March. The median existing-home price was 19% higher than a year ago, at a new record of $341,600. Inventory levels were down 21% from last year, as the number of homes for sale was at just a 2.4-month supply nationally, well below the

6-month supply that is considered a healthy balance between buyers and sellers.


New-home sales, which account for the remaining 10% of the market, also underperformed. In April, they declined 6% from March, which was much weaker than expected, and the March results were revised significantly lower. The median new-home price of $372,400 was 20% higher than the same time last year. In general, the pace of both new and existing sales is being dictated by the supply of homes available each month.

Existing-Home Sales (millions)

Week Ahead

May 28 — Core Personal Consumption Expenditures (PCE) Price Index

June 1 — Institute for Supply Management (ISM) Manufacturing Index

June 3 — ISM Services Index

June 4 — Employment Report