Fewer Americans bought pre-owned homes in April amid a continued supply shortage that pushed prices to a record high, according to industry data released Friday.
The National Association of Realtors (NAR) said existing home sales posted their third consecutive monthly decline, falling 2.7 percent compared to March, defying analysts' expectations of a small increase in the sector that has boomed despite the wider economic malaise caused by the Covid-19 pandemic.
The sales pace slowed to a seasonally adjusted annual rate of 5.85 million, according to the monthly report.
"Home sales were down again in April from the prior month, as housing supply continues to fall short of demand," NAR Chief Economist Lawrence Yun said, adding that he believes demand for homes remains strong.
"We'll see more inventory come to the market later this year as further Covid-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes."
Builders have been struggling to keep up with demand for real estate for many months, however the report said unsold inventory sat at a 2.4-month supply in April, a slight improvement from the month before.
Total housing inventory was 1.16 million units as of the end of the month, 20.5 percent below April 2020 but a 10.5 percent improvement from the prior month.
That pushed the median existing-home price up 19.1 percent from a year ago to $341,600, an all-time high, NAR said.
Low mortgage rates enabled by the Federal Reserve's emergency rate cuts at the start of the Covid-19 crisis helped support the housing market last year even as the US economy grappled with widespread unemployment caused by the pandemic.
But Ian Shepherdson of Pantheon Macroeconomics said the latest data indicates the housing boom peaked months ago, and the sector is set for further declines followed by the possibility of recovery later in 2021.
"We think mortgage demand has been depressed by rising mortgage rates and tighter lending standards, so we're hoping for a revival in the summer," he said in a note.