Soaring prices and a shortage of available homes are starting to hold back the blazing U.S. housing market.
Sales of existing homes fell 2.7 percent in April, the National Association of Realtors said Friday. It was the third straight monthly decline after a surge in transactions earlier in the pandemic.
Mortgage rates have crept up since the start of the year, which has likely put a crimp in demand. But the main force holding back sales isn’t a lack of willing buyers. It is a lack of homes for them to buy — especially at prices they can afford.
The median sales price of an existing home was $341,600 in April, up 19.1 percent from a year earlier. Both the price and the increase were record highs. The number of homes on the market rose in April but was down 20.5 percent from a year ago and remained close to a record low.
As a result, competition for homes can be intense. The Realtors said that 88 percent of homes sold in April were on the market for less than a month. A quarter of buyers paid cash. At Redfin, the online brokerage, half of all homes sold in recent weeks have gone for more than their asking price, up from about a quarter a year ago.
“Even if demand comes down, supply is the issue, and until we see more homes come on the market, that’s going to limit sales,” said Glenn Kelman, Redfin’s chief executive. “When you meet a new buyer you almost say, ‘Good luck.’”
The increase in remote work during the pandemic has led to an increase in demand for homes, particularly outside of city centers. That demand has remained as the economy has begun to reopen, even as millions of millennials are reaching the age when Americans have historically looked to buy homes. But the combination of high prices and limited inventories is making it especially hard for young people to get into the housing market.
“First-time buyers in particular are having trouble securing that first home for a multitude of reasons, including not enough affordable properties, competition with cash buyers and properties leaving the market at such a rapid pace,” Lawrence Yun, chief economist for the National Association of Realtors, said in a statement.
Mayor Lori Lightfoot of Chicago is facing backlash over her decision on Wednesday to grant one-on-one interviews exclusively to journalists of color.
The Wall Street Journal’s editorial board called the decision “overt racism.” A Latino reporter from The Chicago Tribune said he backed out of an interview with the mayor because of it….
Read More: Sales of Existing Homes Fall as Market Tightens and Prices Soar: Live