“Now that we are moving past COVID restrictions, the housing market appears to be moving at a less manic pace. With fewer houses for sale, sales have dropped. However, selling prices continued to rise and set records in April. Homebuyers are also facing a significant increase in mortgage rates, and all factors will contribute to a more balanced marketplace for sellers and buyers,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “The SWMI housing market in April began to show signs of kick-starting the peak selling season from Spring to Fall. From March, the average and median selling prices increased 16 percent and 13 percent, respectively. Sales grew 8 percent (263 vs. 244).”
“Looking at the market year-to-year, the number of houses sold in April dropped 11 percent from April 2021 (263 vs. 296). Year-to-date, in April 2022, 885 houses were sold compared to 1044 in April 2021, which was the record high in the market’s year-over-year comparison,” Jeffries said.
The inventory of houses for sale fell 12 percent to 601 from 680 in April 2021. This brought the inventory of houses for sale down to 2.5-months supply of inventory available for buyers. For comparison, in April 2010, there were 3452 houses for sale and 15.6-months supply of inventory.
Selling prices set new record levels in the year-over-year comparison that dates back to 2006. The average selling price in April 2022 was $364,201 compared to $332,767 in April 2021 for a 9 percent increase. The year-to-date average selling price in April 2022 made a modest 5 percent increase over April 2021 ($327,522 vs. $311,297).
The median selling price in April 2022 raised 4 percent to $ 252,650 from $242,500 in April 2021. Year-to-date, the median selling price climbed 8 percent ($226,400 vs. $209,000). The median selling price and year-to-date median selling price also set new record prices in the month of April in the year-over-year comparison. The median price is the price at which 50% of the homes sold were above that price, and 50% were below.
The total dollar volume fell 3 percent in April 2022 ($95,784,920 vs. $98,499,197). The year-to-date total dollar volume at the end of April 2022 plunged 11 percent ($289,857,261 vs. $324,994,599).
The number of bank-owned or foreclosed homes as a percentage of all transactions dropped to 1 percent in April from 2 percent in March and 3 percent in February. In January, the rate was 0 percent. The previous lowest percentage was 2 percent in April 2021. The highest percentage in April was 54 percent in 2009.
Nationally, in March, the Freddie Mac mortgage rate was 5.10, up from 4.67 in March for a 30-year conventional mortgage.
According to the National Association of Realtors®, – Existing-home salesrecorded a third straight month of declines, slipping slightly in April. Month-over-month sales were split amongst the four major U.S. regions, with two areas posting gains and the other two experiencing waning in April. Year-over-year sales struggled, as each of the four regions reported dips.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, slid 2.4% from March to a seasonally adjusted annual rate of 5.61 million in April. Year-over-year, sales dropped 5.9% (5.96 million in April 2021).
“Higher home prices and sharply higher mortgage rates have reduced buyer activity,” said Lawrence Yun, NAR’s chief economist. “It looks like more declines are imminent in the upcoming months, and we’ll likely return to the pre-pandemic home sales activity after the remarkable surge over the past two years.”
“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,” said Yun.
“Moreover, an increasing number of buyers with short tenure expectations could opt for 5-year adjustable-rate mortgages, thereby assuring fixed payments over five years because of the rate reset,” he added. “The cash buyers, not impacted by mortgage rate changes, remain elevated.”
The median existing-home price for all housing types in April was $391,200, up 14.8% from April 2021 ($340,700), as prices increased in each region. This marks 122 consecutive months of year-over-year increases, the longest-running streak on record.
“Home prices have consistently moved upward as supply remains tight,” Yun said. “However, sellers should not expect the easy-profit gains and should look for multiple offers to fade as demand continues to subside.”
Regionally, existing-home sales in the Northeast rose 1.5% in April, reaching an annual rate of 670,000, a 10.7% drop from April 2021. The median price in the Northeast was $412,100, up 8.1% from one year ago.
Existing-home sales in Midwest grew 3.1% from the prior month to an annual rate of 1,310,000 in April, a 1.5% slide from April 2021. The median price in the Midwest was $282,000, an 8.7% increase from one year ago.
First-time buyers were responsible for 28% of sales in April, down from 30% in March and from 31% in April 2021. NAR’s 2021 Profile of Home Buyers and Sellers – released in late 2021 – reported that the annual share of first-time buyers was 34%.
All-cash sales accounted for 26% of transactions in April, down from 28% in March and up from the 25% recorded in April 2021.
Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in April, down from 18% in March and equal to 17% in April 2021.
Nationally, the total housing inventory at the end of April amounted to 1,030,000 units, up 10.8% from March and down 10.4% from one year ago (1.15 million). Unsold inventory sits at a 2.2-month supply at the current sales pace, up from 1.9 months in March and down from 2.3 months in April 2021.
“Housing supply has started to improve, albeit at an extremely sluggish pace,” said Yun.
Realtor.com®‘s Market Trends Report in April shows that the largest year-over-year median list price growth occurred in Miami (+38.3%), Las Vegas (+32.6%), and Orlando (+30.7%). Austin reported the highest growth in the share of homes that had their prices reduced compared to last year (+6.8 percentage points), followed by Las Vegas (+5.3 percentage points) and Sacramento (+4.7 percentage points).
“As we find ourselves in the midst of a massive housing shortage, NAR continues to work with leaders across the private and public sectors to help close this deficit,” said NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “As the nation’s largest real estate association, we are urging policymakers to enact zoning reforms, homebuilder incentives, and other necessary regulations to help correct this situation.”
The numbers reported for local sales include residential property in Allegan, Berrien, Cass, and the westerly two-thirds of Van Buren counties and should not be used to determine the market value of any individual property. If you want to know the market value of your property, please contact your local REALTOR®.
The Southwestern Michigan Association of REALTORS®, Inc. is a professional trade association for real estate licensees who are members of the National Association of REALTORS® and ancillary service providers for the real estate industry in Allegan, Berrien, Cass, and Van Buren Counties. The Association can be contacted at 269-983-6375 or through their website at www.swmar.com.
The National Association of Realtors®, “That’s Who We R,” is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.