Existing home sales in the United States crept lower in April as mortgage rates remained elevated, industry data showed Wednesday.
Sales of previously owned homes dipped by 1.9 percent from March, reaching a seasonally adjusted annual rate of 4.14 million, said the National Association of Realtors (NAR).
Analysts had expected a slight uptick last month.
"Home sales changed little overall, but the upper-end market is experiencing a sizable gain due to more supply coming onto the market," NAR chief economist Lawrence Yun said in a statement.
Total housing inventory at the end of April was up nine percent from March, and was 16.3 percent higher than the same period a year ago.
But the level of 1.2 million units remains markedly lower than the pre-pandemic period, Yun said in a press briefing, adding that inventory remains "tight" despite the uptick.
Mortgage rates have surged in recent years as the Federal Reserve rapidly hiked the benchmark lending rate to tackle stubborn inflation.
For now, the central bank continues to hold rates steady as it seeks to stamp out price increases.
As of May 16, the popular 30-year fixed-rate mortgage averaged 7.02 percent, up from 6.39 percent a year prior, according to home loan finance firm Freddie Mac.
In mid-May 2021, the rate was around three percent.
Higher rates have weighed on transactions, as homeowners who locked in lower rates previously remained reluctant to enter the market.
"It is a very frustrating market out there" for homebuyers, Yun told reporters. "Home prices are at record high, mortgage rates are high."
"It's a very strange situation where lack of inventory to some degree looks like it's hindering sales," he added.
From a year ago, home sales were also 1.9 percent lower in April, NAR data showed.
The median sales price in April rose 5.7 percent from a year ago to $407,600 -- the highest since June 2023.
Looking ahead, however, "the pace of price increases should taper off since more housing inventory is becoming available," Yun said.
Mortgage demand is expected to remain tepid in the near term, given that long-term rates are still elevated, analysts from Pantheon Macroeconomics said in a recent note.
"We expect a decline in long-term rates over the next couple of months, but we also expect the labor market will start to look much weaker, slowing the growth in the pool of potential homebuyers," Pantheon added.
