“After a burst of steam in March, the April housing market chilled, with sales and selling prices falling behind last year.” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “In April 2023, the number of houses sold dropped to 194 from 263 sold in April 2022, for a 26 percent decrease. Year-to-date, 739 houses were sold, compared to 885 houses in April 2022, for a 16 percent decline in sales.”
The inventory of houses for sale increased slightly from a year ago (617 vs. 601), bringing the inventory of houses for sale up to 3.3-months of inventory available for buyers compared to 2.5 months of inventory in April 2022. The current inventory continues to hover at a low level for the market area. Previously, the market had a 5.8-months supply of houses for sale in April 2019, in the middle of the peak selling rush. Going back further in the year-over-year comparison, in April 2010, there were 3452 houses for sale for a 15.6-months supply of houses for buyers.
The average selling price in April 2023 was $324,093 compared to $364,201 in April 2022, for an 11 percent decrease. Year-to-date, the average selling price in April 2023 declined 7 percent from April 2022 ($306,103 vs. $327,522).
The median selling price in April 2023 at $240,000 fell 5 percent from $252,650 in April 2022. Year-to-date, the median selling price decreased by $1,400 ($225,000 vs. $226,400).
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
The drop in sales and selling prices lowered the total dollar volume in April 2023 by 34 percent compared to April 2022 ($62,893,256 vs. $95,784,920). The year-to-date total dollar volume dropped 22 percent ($226,211,850 vs. $ 289,857,261).
The number of bank-owned or foreclosed homes as a percentage of all transactions stayed at 3 percent, the same as in March 2023. The previous lowest percentage was 2 percent in April 2021, and the highest percentage in April was 54 percent in 2009.
The Freddie Mac mortgage rate in April was 6.43, up from 6.32 in March for a 30-year conventional mortgage. A year ago, the rate was 5.1.
According to the National Association of Realtors®, existing-home sales decreased in April. All four major U.S. regions registered month-over-month and year-over-year sales declines.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, slid 3.4% from March to a seasonally adjusted annual rate of 4.28 million in April. Year-over-year, sales slumped 23.2% (down from 5.57 million in April 2022).
“Home sales are bouncing back and forth but remain above recent cyclical lows,” said NAR Chief Economist Lawrence Yun. “The combination of job gains, limited inventory, and fluctuating mortgage rates over the last several months have created an environment of push-pull housing demand.”
The median existing-home price for all housing types in April was $388,800, a decline of 1.7% from April 2022 ($395,500). Prices rose in the Northeast and Midwest but retreated in the South and West.
“Roughly half of the country is experiencing price gains,” Yun noted. “Even in markets with lower prices, primarily the expensive West region, multiple-offer situations have returned in the spring buying season following the calmer winter market. Distressed and forced property sales are virtually nonexistent.”
In the Midwest, existing-home sales retracted 5.5% from one month ago to an annual rate of 1.03 million in March, falling 17.6% from the previous year. The median price in the Midwest was $273,400, up 1.7% from March 2022.
In the Midwest, existing-home sales declined 1.9% from one month ago to an annual rate of 1.02 million in April, dropping 21.5% from the prior year. The median price in the Midwest was $287,300, up 1.8% from April 2022.
“As documented in NAR’s recent report about housing wealth gains by homeowners over the last decade, homeownership offers a road to financial security and wealth development,” said NAR President Kenny Parcell, a Realtor® from Spanish Fork, Utah, and broker-owner of Equity Real Estate Utah. “Rely on a Realtor® to provide sound advice while purchasing your first home or next home.”
First-time buyers accounted for 29% of sales in April, up from 28% in both March 2023 and April 2022. NAR’s 2022 Profile of Home Buyers and Sellers – released in November 2022 – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
All-cash sales accounted for 28% of transactions in April, up from 27% in March and 26% the previous year.
Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in April, identical to March and one year ago.
The total housing inventory registered at the end of April was 1.04 million units, up 7.2% from March and 1.0% from one year ago (1.03 million). Unsold inventory sits at a 2.9-month supply at the current sales pace, up from 2.6 months in March and 2.2 months in April 2022.
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.