NAR: Existing-Home Sales Rose 1.3% In April

Posted by Patrick Barnard on May 22, 2014 No Comments
Categories : Residential Mortgage

Existing-home sales inched up 1.3% on an adjusted basis in April, reaching an annual pace of 4.65 million, but were 6.8% below the April 2013 rate of 4.99 million, according to the National Association of Realtors (NAR). It was the first month this year that existing-home sales trended upward.

In addition, total housing inventory at the end of April jumped 16.8% to reach 2.29 million existing homes available for sale. This is about a 5.9-month supply at the current sales pace, up from 5.1 months in March, NAR says. Unsold inventory is 6.5% higher than a year ago, when there was a 5.2-month supply.

Lawrence Yun, chief economist for NAR, says, ‘Some growth was inevitable after subpar housing activity in the first quarter, but improved inventory is expanding choices, and sales should generally trend upward from this point.’

‘Annual home sales, however, due to a sluggish first quarter, will likely be lower than last year,’ he adds.

Monthly sales gains in the West and South offset a modest decline in the Midwest while the Northeast was unchanged.

‘We'll continue to see a balancing act between housing inventory and price growth, which remains stronger than normal simply because there have not been enough sellers in many areas. More inventory and increased new-home construction will help to foster healthy market conditions,’ Yun adds.

The median existing-home price for all housing types in April was $201,700, a 5.2% increase compared to April 2013. In the first quarter, the median price was 8.6% above that of a year earlier.

‘Current price data suggests a trend of slower growth, which bodes well for preserving favorable affordability conditions in much of the country,’ Yun says.

Earlier this month, NAR reported the market share of all-cash purchases has risen despite a downward trend in distressed-home sales and investor activity. Distressed homes – foreclosures and short sales – accounted for 15% of April sales, down from 18% in April 2013.

About 10% of April sales were foreclosures, and 5% were short sales. Foreclosures sold for an average discount of 16% below market value in April, while short sales were discounted 10%.

NAR President Steve Brown, co-owner of Irongate Inc., Realtors in Dayton, Ohio, says there was some heating of the market last month.

‘The typical time on market shrunk in April, with four out of 10 homes selling in less than a month,’ he says. ‘Homes that show well and are properly priced tend to sell the fastest. More housing inventory gives buyers better choices and takes the pressure off of the buying process, which is a welcome sign, especially for first-time buyers.’

The report finds that first-time buyers continue to represent less than one third of all buyers at 29% in April, down from 30% in March. However, this isn't much of a change compared to April 2013, when first-time buyers represented 29% of all sales.

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