The National Association of Retailers reported that April’s sales of properties previously owned fell to their lowest level since the Covid pandemic.

According to the group, existing home sales decreased 2.4% when compared to March. The annualized seasonally adjusted rate was 5.61 millions units. This was 5.9% more than April 2021. The rate was 5.9% lower than April 2021, and it is artificially low since June 2020 when the economy suffered from severe shutdowns.

The month’s closings represent contracts signed during February or March as mortgage rates rose. According to Mortgage News Daily, the average 30-year fixed rate started at 3.66% in February and ended at 4.78% in March. The current rate is hovering at 5.45%.

Lawrence Yun, NAR’s chief economist, stated, “We are moving back towards pre-pandemic activity, but we expect further declines,” citing the fact that rates today are higher than they were at signing these contracts.

Rising rates were a problem for buyers, and they also didn’t see any relief in the scarcity of homes available. At the end April, inventory was at 1.03million homes available for sale. This is 10.4% less than April 2021. That’s a 2.2 month supply at current sales rates.

Even with rising interest rates, home prices remained higher due to tight supply. In April, the median home price was $391,000. This is the highest recorded figure and an increase by 14.8% over a year.

This median is biased higher due to the fact that sales remain more strong at the top end of the market where there is less supply. While sales of properties priced between $100,000-$250,000 declined 29%, those between $500,000-$750,000 saw a 19% increase in sales. The sales of homes valued at over $1million rose by 16% in comparison to a year earlier.

The average house was on the market for just 17 days before it went under contract. With 25% of sales, all cash was a high percentage. Investors accounted for 17%, while first-time buyers accounted for 28%. In the past, about 40% of market was made up by first-time buyers.

“Despite the waning belief that this is an ideal time to buy, interest in homeownership remains high.” Danielle Hale is chief economist of Realtor.com. “This is particularly true with younger home buyers, who are more likely to be first-time homeowners and have difficulty saving for a downpayment as rents continue hitting record highs.” The demand for sellers to pay higher down payments is rising due to a competitive housing market, and repeat buyers who have more equity.

The Mortgage Bankers Association reports that sales of newly constructed homes will be published next week. But mortgage applications for such homes decreased nearly 11% compared to April 20,21.

Joel Kan (MBA’s Associate Vice President of Economic and Industry Forecasting) stated that “new home purchases declined in April on both a monthly basis and annually as the rise in mortgage rates cooled down demand and homebuilders continued with grappling with rising costs and supply-chain problems and extended completion times.”

MBA forecasts new home sales falling for the fifth consecutive month, at the lowest pace since May 2020.