This increase resulted in an uptick in inventory since last month, bringing welcome news to prospective buyers navigating low housing supply.
According to the latest RE/MAX National Housing Report, the competitive spring market continued in April 2022, bringing an increase in new listings to potential homebuyers and a continuation of rising prices, no doubt enjoyed by sellers. The month did, however, see a flattening of the seasonal spring ramp-up as April 2022 home sales increased less than 1% over March – and dropped 12.8% year-over-year – across the report’s 53 measured metro areas.
After a frenzied two-year run, the market appears to be shifting slowly toward more balance.
Nick Bailey, President and CEO of RE/MAX, LLC, anticipates a strong second half to 2022, albeit at a bit of a slower place.
“In the big picture, it’s still a strong housing market, with sales happening quickly and demand easily outpacing supply,” Bailey says. “We’re starting to see a cooling in sales, which isn’t surprising given the record results of 2021 and the recent rise in interest rates. That should create more balance over time, countering the frenzied seller’s market we’ve had for so long. Driven by generational demand, rising rental costs and still relatively low interest rates, 2022 could still rank as one of the best years in the past decade.”
Lawrence Yun, Chief Economist of the National Association of REALTORS®, also commented on the seemingly changing dynamics in the housing market and the paradox of buyer demand, rising inventory and climbing home prices in NAR’s most recent Existing-Home Sales Report.
“The market is quite unusual as sales are coming down, but listed homes are still selling swiftly, and home prices are much higher than a year ago,” Yun said in the NAR report.
A new metric measured by the RE/MAX report and first included in the April 2022 release, average sale to list price ratio, found that despite a slight cooling in demand, home offers are increasingly getting more competitive. The metric measures how close homes are selling to their asking price and in April, the average sale to list price ratio was 104% of the list price, compared to 103% in March and 101% in April 2021.
With real estate being an industry that is uniquely hyper-local, it’s worth examining what housing trends other metro areas around the country are seeing.
Josh Horner, a real estate agent with RE/MAX Masters in Salt Lake City, Utah, noted the rate hikes have sent a segment of home buyers to the sidelines.
“We’re seeing slightly longer days on market and price reductions for homes not selling in the first 14 or so days,” says Horner. “After two full years of aggressive home list prices, the change has come as a shock to some. In our experience, however, it signals a healthy adjustment back to more normal valuation increases.”
Here’s the need-to-know data from the U.S. metro areas surveyed for the April 2022 RE/MAX National Housing Report:
Homebuying Frequency Cooled Slightly
Of the 53 metro areas surveyed in April 2022, the overall average number of home sales is up 0.5% compared to March 2022, and down 12.8% compared to April 2021. The markets with the biggest decrease in year-over-year sales percentage were Miami, FL at -24.9%, Bozeman, MT at -22.5%, and Coeur d’Alene, ID at -21.1%. Only one metro area had a year-over-year sales percentage increase, Honolulu, HI at +0.2%.
Home Prices Continued to Rise
In April 2022, the median of all 53 metro area Sales Prices was $420,000, up 3.4% compared to March 2022, and up 15.1% from April 2021. No metro areas saw a year-over-year decrease in Median Sales Price. Forty-one metro areas increased year-over-year by double-digit percentages, led by Dallas, TX at +39.5%, Fayetteville, AR at +33.4%, and Coeur d’Alene, ID at +31.2%.
Supply Is Improving but Still Falls Short of Demand
Though up 24.0% month over month, active inventory was down 10.4% from a year ago, driven in part by a 7.4% decline in new listings year over year. Months Supply of Inventory increased from 0.7 in March to 0.8 in April. For context, a year ago, Months Supply of Inventory was 1.0. In April 2022, the markets with the lowest Months Supply of Inventory were a three-way tie among Albuquerque, NM, Fayetteville, AR, and Raleigh, NC at 0.3.
Article originally appeared on RE/MAX.com.
