Existing home sales in the U.S. fell 1.9% in April as high mortgage rates dampened the housing rebound.

According to the National Association of Realtors reports, home sales to a seasonally adjusted annual rate of 4.14M—an improvement over the 3.7% year-over-year decline the housing market saw in March.

The yin-yang of the housing market continues—thanks to a supply/demand mismatch driven by higher mortgage rates.

“Last year, buyers returned to the housing market ahead of the spring season, but many sellers opted to stay on the sidelines,” said Zillow senior economist Orphe Divounguy.

“This year more sellers are back well ahead of the spring shopping season. However, buyers — faced with a sharp increase in mortgage rates — have been slow to return.”

Another factor impacting buyers is a steady rise in home values—with the median existing-home sales price in April creeping above $400,000 to $407,600, a 5.7% increase from April 2023.

”Although higher inventory points to the potential for more price cuts and easing price growth, well-marketed and competitively priced listings are selling fast and prices are still rising,” Divounguy said.

“According to Zillow data, homes that sold did so in just 13 days — faster than the pre-pandemic norm of 21 days.”

Springtime slumber

Springtime is typically a time when the housing market kicks into high gear.

But with mortgage rates creeping back over 7% nationally and supply currently outpacing demand, the housing market has yet to bloom this season.

“Buyers had a lot more options to choose from, as inventory rose 6.4% from March to April and rose 18% over last year, the second-largest annual increase since at least 2019,” Zillow recently reported.

“They also had more fresh options, with new listings up nearly 11% month over month and rising almost 16% year over year.”

U.S. Home values grew 1.2% on a monthly basis in April and are now 4.4% higher than a year ago—a slowdown from the 4.6% annual growth seen in March.

While home prices keep growing, recent data from Zillow indicates that sellers are increasingly becoming more aggressive with their listings to lure potential buyers.

Just under a quarter of listings (22.4%) saw a price cut in April—a 1.9% uptick from the month prior.

Western U.S. outpaces other regions for now

While sales are in decline on a national level, the West stands out as the only region with a year-over-year increase in sales in April.

With a modest 1.3% increase in April, the West outpaced the other regions in home sales last month — compared with a 4.0% decline in the Northeast, a 3.1% decline in the South, and 1.0% decline in the Midwest.

All four regions saw a drop in sales compared with March 2024—with the Northeast region seeing the largest decline of 4.0%.

Thanks to a thriving job market across Southern states, economists predict that southern U.S. housing markets will outpace the rest of the nation this year.

“We think markets in the south will continue to lead the pack, supported by still-reasonable house prices and high levels of inward migration thanks to their thriving job markets,” said Thomas Ryan, Capital Economics property economist.

“The bigger picture is that housing demand will continue to be the strongest in the southern metros over the next few years, outweighing rising supply. As a result, they will continue to lead the way on price rises.”