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Sales of existing homes in April fell 2.7 percent year-over-year, the third consecutive month of decline, the National Association of Realtors (NAR) reported.
Rising mortgage rates and record home prices, now averaging $341,000, have pushed even more potential buyers out of the market, analysts said.
More homes came on the market in April, bringing the inventory to a 2.4-month supply, up from 2.1 months’ worth for sale in March, but the number is still near record lows.
“We’ll see more inventory come to the market later this year as vaccinations are administered and potential home sellers become more comfortable listing and showing their homes,” NRA chief economist Lawrence Yun said in a statement announcing the April result.
New housing starts fell back 9.6 percent in April, year-over-year, as shortages of labor, materials, and building lots plagued the industry. Also, some builders are delaying projects until materials prices come down and enough workers return to the labor force.
TREND FORECAST: As interest rates rise, home prices will not rise at current rates. We forecast they will increase several percent this year and marginally rise in 2022, as the great escape to safe-COVID suburbs and prosperous ex-burbs cools.