Spring Housing Market Struggles Amid High Interest Rates and Low Consumer Confidence

SOURCE www.cnbc.com
The spring housing market is struggling due to high interest rates and low consumer confidence. Sales of previously owned homes declined in April, inventory increased, and prices are cooling off slightly.

Key Points

  • Sales of previously owned homes declined by 0.5% in April to a seasonally adjusted rate of 4 million units.
  • Inventory increased by 9% month-over-month and was nearly 21% higher than the previous year.
  • Median home prices increased by 1.8% year-over-year, the slowest appreciation since July 2023.
  • Cancellation rates rose to 7% in April, up from the usual average of 3% to 4%.

Pros

  • Inventory levels are the highest in nearly five years, giving consumers more negotiating power.
  • Higher-end home sales have seen an increase, particularly for homes priced over $1 million.

Cons

  • Sales of previously owned homes declined in April compared to the previous month and year.
  • Cancellation rates are rising, indicating some uncertainty in the market.