April Existing Home Sales Down 0.4%

Existing home sales fell slightly in April, the National Association of Realtors reported yesterday.

NAR said total existing home fell by 0.4% from March to a seasonally adjusted annual rate of 5.19 million in April. Total sales fell by 4.4% from a year ago (5.43 million in April 2018).

The report said single-family home sales fell to a seasonally adjusted annual rate of 4.62 million in April, down from 4.67 million in March and down by 4.0% from 4.81 million a year ago. The median existing single-family home price rose to $269,300 in April, up by 3.7% from a year ago. Existing condominium and co-op sales rose to a seasonally adjusted annual rate of 570,000 units in April, up 5.6% from March but down by 8.1% from a year ago. The median existing condo price rose to $251,000 in April, up by 3.4% from a year ago.

Regionally, results were mixed. In the South, sales fell by 0.4% to an annual rate of 2.27 million in April, down 1.7% from a year ago. The median price in the South rose to $236,800, up 4.4% from a year ago. In the West, sales rose by 1.8% to 1.11 million in April, but fell by 5.9% from a year ago. The median price in the West rose to $395,100, up 1.3% from a year ago.

In the Northeast, sales fell by 4.5% to an annual rate of 640,000, 4.5% below a year ago. The median price in the Northeast rose to $277,700, up 0.9% from a year ago. In the Midwest, existing-home sales saw no change from March at 1.17 million, 7.9% lower than a year ago. The median price in the Midwest rose to $210,500, an increase of 5.5% from a year ago.

Mortgage Bankers Association Chief Economist Mike Fratantoni noted despite the April drop, unadjusted data show some strength, particularly in the South and Northeast, suggesting that seasonal patterns may be a bit different this year. “We view it as a positive that inventories continue to increase, although the supply of homes on the market remains relatively tight, and the pace of home-price increases continues to decelerate,” he said. “The strong job market and lower rates should continue to support the potential for more home sales this year.”

Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., said despite lower mortgage rates, resales have fallen in five of the past six months. “Lower mortgage rates have helped stymie the sharp pullback in home sales seen last year but have clearly not reversed it,” he said. “Still, while somewhat underwhelming, existing sales remain at a fairly solid pace and are running just slightly below their year ago pace through April, thanks to the surge in sales during February.”

Vitner said a “mismatch” between strengthening entry level demand and scarce entry level supply is also likely playing a role in this year’s underwhelming sales pace. “That said, we expect some improvement in this area. On a year-over-year basis, inventories rose 1.7% during April and have improved for the past nine months. Homes also continue to sell fairly quickly.”

NAR Chief Economist Lawrence Yun said he was not overly concerned about the April dip in sales and expects moderate growth very soon. “First, we are seeing historically low mortgage rates combined with a pent-up demand to buy, so buyers will look to take advantage of these conditions,” he said. “Also, job creation is improving, causing wage growth to align with home price growth, which helps affordability and will help spur more home sales.”

NAR reported the median existing home price for all housing types in April rose to $267,300, up 3.6% from a year ago, marking the 86th straight month of year-over-year gains. Total housing inventor at the end of April increased to 1.83 million, up from 1.67 million in March and a 1.7% increase from 1.80 million a year ago. Unsold inventory is at a 4.2-month supply at the current sales pace, up from 3.8 months in March and up from 4.0 months a year ago.

The report said properties remained on the market for an average of 24 days in April, down from 36 days in March and down from 26 days a year ago. Fifty-three percent of homes sold in April were on the market for less than a month.

First-time buyers represented 32% of sales in April, down from the 33% in March month and one year ago. All-cash sales accounted for 20% of transactions in April, down from March and a year ago (21%). Individual investors purchased 16% of homes in April, down from March’s 18%, but up from a year ago (14%).

NAR said distressed sales represented 3% of sales in April, equal March and down from 4% a year ago. One percent were short sales.