After two months of consecutive gains, existing-home sales retreated in April both on a monthly and annualized basis, fueled by “staggeringly low” inventory levels.
The National Association of Realtors (NAR) said total existing-home sales — which are completed transactions that include single-family homes, townhomes, condominiums and co-ops — fell 2.5% to a seasonally adjusted annual rate of 5.46 million in April from 5.60 million in March.
With last month’s decline, sales are now 1.4% below a year ago and have fallen year-over-year for two straight months.
“The root cause of the underperforming sales activity in much of the country so far this year continues to be the utter lack of available listings on the market to meet the strong demand for buying a home,” Lawrence Yun, NAR chief economist said. “Realtors say the healthy economy and job market are keeping buyers in the market for now even as they face rising mortgage rates. However, inventory shortages are even worse than in recent years, and home prices keep climbing above what many home shoppers are able to afford.”
The median existing-home price for all housing types in April came in at $257,900, a gain of 5.3% from April 2017 ($245,000). March’s price increase marks the 74th straight month of year-over-year gains.
While total housing inventory at the end of April gained 9.8% to 1.80 million existing homes available for sale, that’s still 6.3% lower than a year ago (1.92 million). Inventory has fallen year-over-year for 35 consecutive months. Unsold inventory is at a 4.0-month supply at the current sales pace (4.2 months a year ago).
Properties typically stayed on the market for 26 days in April, which is down from 30 days in February and 29 days a year ago. Fifty-seven percent (57%) of homes sold in April were on the market for less than a month.
“What is available for sale is going under contract at a rapid pace,” Mr. Yun added. “Since NAR began tracking this data in May 2011, the median days a listing was on the market was at an all-time low in April, and the share of homes sold in less than a month was at an all-time high.”
Thirty-three percent (33%) of sales in April were first-time buyers, the highest since last July. That is up from 30% last month but down from 34% a year ago.
“Especially with mortgage rates going up in recent weeks, prospective buyers should visit with more than one lender to ensure they are getting the lowest rate possible,” NAR President Elizabeth Mendenhall said. “Receiving a rate quote from multiple lenders could lead to considerable savings over the life of the loan.”
Existing-home sales in the Northeast fell 4.4% to an annual rate of 650,000 and are 11.0% below a year ago. The median price in the Northeast was $275,200, or 2.8% higher than April 2017.
In the Midwest, existing-home sales were unchanged at an annual rate of 1.29 million in April and are 3.0% below a year ago. The median price in the Midwest was $202,100, up 4.6% from a year ago.
Existing-home sales in the South fell 2.9% to an annual rate of 2.33 million in April. However, they are still 2.2% higher than they were a year ago. The median price in the South was $227,600, up 3.9% from a year ago.
Existing-home sales in the West fell 3.3% to an annual rate of 1.19 million in April, and are 0.8% below a year ago. The median price in the West was $382,100, up 6.2% from April 2017.