NAR optimistic as existing sales decline in April
Home sales continued to decelerate in April, according to the National Association of Realtors. However, the organization anticipates that pent-up demand will help buoy sales in the following months.
The seasonally adjusted annual rate for existing home sales in the United States stood at 5.19 million for the month. This was down 0.4 percent from March and a 4.4 percent drop from the previous year – the 14th straight month of year-over-year declines.
Single-family homes had a seasonally adjusted annual rate of 4.62 million, falling 1.1 percent from the previous month and 4 percent from the previous year. The rate for condominiums and co-ops stood at 570,000 units, up 5.6 percent from March but a year-over year drop of 8.1 percent.
Lawrence Yun, chief economist for the National Association of Realtors, said he expects sales to pick up in the late spring and early summer due to lower mortgage rates. He also suggested that many potential buyers have been waiting for conditions to improve before purchasing a home, and that lower interest costs may help encourage them to make an offer.
"Also, job creation is improving, causing wage growth to align with home price growth, which helps affordability and will help spur more home sales," said Yun.
"I think the market had a bit of a slow start in the fall, but Realtors all over the country have been telling me that April was a nice rebound," said John Smaby, president of the National Association of Realtors. "Homes over the last month sold quickly, which is not only a win-win for buyers and sellers, but it's also great for the real estate industry."
Inventory continued to improve, with 1.83 million homes listed for sale in April. This supply was up 9.6 percent from March and 1.7 percent from April 2018. Yun said sellers should be aware of this increased competition when listing their property and setting their price.
At the same time, home prices continued their year-over-year gains for the 86th consecutive month. The median price for a home sold in April was $267,300, up 3.6 percent from April 2018. Single-family homes had a median annual price increase of 3.7 percent to $269,300, while the typical price for a condo or co-op rose 3.4 percent to $251,000.
Homes sold in April had been on the market for an average of 24 days, 12 days faster than in March and two days faster than in April 2018. Fifty-three percent of these listings had been on the market for less than a month.
According to Freddie Mac, the average rate for a 30-year fixed rate conventional mortgage for the month was 4.14 percent. This was down from 4.27 percent in March and the 2018 average of 4.54 percent.
Thirty-two percent of April's sales went to buyers purchasing their first home. The first-time buyer share was down slightly from 33 percent in both the previous month and previous year.
One in five homes were purchased without financing, down from 21 percent in both March and April 2018. Individual investors, who often buy homes with cash, accounted for 16 percent of sales – down from 18 percent in March but up from 14 percent in April 2018.
Distressed sales made up 3 percent of the month's transactions, matching the previous month's share and down from 4 percent in April 2018. Two percent of sales were foreclosures and 1 percent were short sales.
The annual home sales rate in the Northeast stood at 640,000, down 4.5 percent from both the previous month and previous year. The median home sales price in the region increased 0.9 percent from the previous year to $277,700.
The West was the only region with some increase to its annual rate, which was up 1.8 percent to 1.11 million – an annual drop of 5.9 percent. The median price in the region increased 1.3 percent from April 2018.
The strongest price increase occurred in the Midwest, where the median sales price was up 5.5 percent to $210,500. The region's annual sales rate of 1.17 million was relatively unchanged from the previous month, but down 7.9 percent from the previous year.
In the South, the sales rate fell 0.4 percent from the previous month and 1.7 percent from the previous year to 2.27 million. The median price in the region rose 4.4 percent to $236,800.
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