Existing Home Sales Rise for 2nd Month

Existing home sales, driven by condo sales, rose at a better-than-expected pace in April, the National Association of Realtors reported Friday.

NAR said total existing home sales, rose by 1.7 percent to a seasonally adjusted annual rate of 5.45 million in April from an upwardly revised 5.36 million in March. After last month’s gain, sales improved by 6.0 percent from a year ago.

Single-family home sales rose by 0.6 percent to 4.81 million in April, seasonally adjusted, from 4.78 million in March, and improved by 6.2 percent from a year ago (4.53 million) The median existing single-family home price rose to $233,700 in April, up 6.2 percent from a year ago.

Existing condominium and co-op sales jumped by 10.3 percent to 640,000 units in April from 580,000 in March, and improved by 4.9 percent from a year ago (610,000 units). The median existing condo price rose to $223,300 in April, 6.8 percent above a year ago.

Regionally, gains in the Northeast and Midwest offset losses in the South and West. Sales in the Northeast rose by 2.8 percent to an annual rate of 740,000 and improved by 17.5 percent from a year ago. The median price in the Northeast rose to $263,600, 4.1 percent higher than a year ago.

In the Midwest, existing home sales rose by 12.1 percent to 1.39 million and improved by 12.1 percent from a year ago. The median price in the Midwest rose to $184,200, up 7.7 percent from a year ago.

Sales in the South declined by 2.7 percent to 2.19 million but improved by 4.3 percent from a year ago. The median price in the South rose to $202,800, up 6.5 percent from a year ago.

Sales in the West decreased by 1.7 percent to 1.13 million in April and by 3.4 percent from a year ago. The median price in the West rose to $335,000, 6.5 percent higher than a year ago.

Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., noted while single-family home sales rose by just 0.6 percent in April, they are up 6.2 percent from a year earlier.

“Condo prices are garnering media attention as markets like Miami are beginning to lose some of their momentum,” Vitner said. “That said, the median price for a condo is up 4.9 percent over the past year.”

NAR Chief Economist Lawrence Yun said April’s sales increase signals slowly building momentum for the housing market this spring. “Primarily driven by a convincing jump in the Midwest, where home prices are most affordable, sales activity overall was at a healthy pace last month as very low mortgage rates and modest seasonal inventory gains encouraged more households to search for and close on a home,” he said. “Except for in the West–where supply shortages and stark price growth are hampering buyers the most–sales are meaningfully higher than a year ago in much of the country.”

NAR said the median existing-home price for all housing types in April rose to $232,500, up 6.3 percent from a year ago ($218,700). April’s price increase marks the 50th consecutive month of year-over-year gains.

Total housing inventory at the end of April increased by 9.2 percent to 2.14 million existing homes available for sale, but is still 3.6 percent lower than a year ago (2.22 million). Unsold inventory is at a 4.7-month supply at the current sales pace, up from 4.4 months in March.

“The lack of inventory in the for-sale market has been the primary obstacle to a more robust housing recovery, keeping prices in a tight range,” Vitner said. “However, inventories rose for the fourth consecutive month in April as sellers are becoming more comfortable putting their homes on the market. Still-low mortgage rates are also aiding activity.”

NAR said properties typically stayed on the market for 39 days in April (47 days in March), unchanged from a year ago but the shortest duration since June 2015 (34 days). Short sales were on the market the longest at a median of 120 days in April, while foreclosures sold in 51 days and non-distressed homes took 37 days. Forty-five percent of homes sold in April were on the market for less than a month, the highest since June 2015 (47 percent).

The report said the share of first-time buyers was 32 percent in April, up from 30 percent both in March and a year ago. First-time buyers in all of 2015 also represented an average of 30 percent.

All-cash sales fell to 24 percent of transactions in April, down from 25 percent in March and unchanged from a year ago. Individual investors purchased 13 percent of homes in April (matching the lowest share since October 2015), down from 14 percent in both in March and a year ago. Sixty-nine percent of investors paid cash in April.

Distressed sales declined for the second straight month to 7 percent in April, down from 8 percent last month and 10 percent a year ago. Five percent of April sales were foreclosures, while 2 percent were short sales. Foreclosures sold for an average discount of 17 percent below market value in April (16 percent in March), while short sales were discounted 10 percent (unchanged from March).