Even as new home sales plunged in April, home prices pushed to a record high, leaving certain key statistics about the housing market at levels not seen since the lead-up to 2008 mortgage crisis.
The latest reading for new home sales showed a 17% drop in April compared to the previous month. Looking on a year-over-year basis, the figure plunged 27%.
Still, April saw a continued uptick in the price of new homes. The median sales price rose to $450.6K in the month, compared to $436.7K in March.
The rising cost, combined with climbing interest rates, have priced many out of the current housing market, a factor that could put further pressure on key industry statistics in the coming months.
According to a report issued by UBS, the affordability for existing homes, or homes that have had at least one previous owner, has declined to its lowest level since 2007, just before the mortgage-induced financial crisis of the late 2000s.
According to UBS, the ratio of median family income to the qualifying income for a median-priced existing home (a figure that measures how easy it is for a typical family to afford a home) likely came in at 1.09 in April. This was down from 1.24 in the previous month. Meanwhile, the figure sat at 1.56 for all of 2021.
A separate analysis provided by eToro indicated that the overall housing market has become the least affordable in 40 years. Citing its U.S. housing "misery" index, the firm pointed to a 20% rise in home prices over the past year and decade-high levels in mortgage rates.
With higher prices and signs of flagging demand, the number of unsold houses on the market has increased. The latest figures showed that unsold inventory for new homes has reached its highest level since May of 2008.
With the increase in housing inventory and the drop in the pace of sales, there are now enough unsold new houses to match 9 months of sales. This was up dramatically from March's figures, which showed 6.9 months' worth of unsold inventory.
As a result, UBS expects further deterioration in other closely watched housing stats. The firm argued that April's decline might "somewhat exaggerate the weakening" in the housing market, but still pointed to a "clear" downtrend.
"The general trend lower in new home sales should show through to housing starts and permits data more clearly in coming months," the firm concluded.
Given these pressures, home building stocks have declined steadily through 2022. The SPDR Homebuilders ETF (XHB), which tracks the industry, has retreated more than 30% since the end of last year. That included a nearly 3% slide on Tuesday in the wake of the housing statistics, taking the ETF to a new 52-week low.
For more on the XHB and the general housing market, see why Seeking Alpha contributor Hale Stewart declares: "don't fight the Fed."