Sales of existing homes dipped 2.3% to a seasonally adjusted annual rate of 5.57 million in April from a downwardly revised 5.70 million in March but were still 1.6% ahead of the same month last year, the National Association of Realtors reported Wednesday.
Lawrence Yun, NAR chief economist, says every major region except for the Midwest saw a retreat in existing sales in April. “Last month’s dip in closings was somewhat expected given that there was such a strong sales increase in March at 4.2%, and new and existing inventory is not keeping up with the fast pace homes are coming off the market,” he said. “Demand is easily outstripping supply in most of the country and it’s stymieing many prospective buyers from finding a home to purchase.”
The median existing-home price for all housing types in April was $244,800, up 6.0% from April 2016 ($230,900). April’s price increase marks the 62nd straight month of year-over-year gains.
Single-family home sales decreased 2.4% to a seasonally adjusted annual rate of 4.95 million in April from 5.07 million in March, but are still 1.6% above the 4.87 million pace a year ago. The median existing single-family home price was $246,100 in April, up 6.1% from April 2016.
Existing condominium and co-op sales declined 1.6% to a seasonally adjusted annual rate of 620,000 units in April, but are still 1.6% higher than a year ago. The median existing condo price was $234,600 in April, which is 5.6% above a year ago.
April existing-home sales in the Northeast dipped 2.7% to an annual rate of 730,000, and are now 2.7% below a year ago. The median price in the Northeast was $267,700, which is 1.6% above April 2016. In the Midwest, existing-home sales increased 3.8% to an annual rate of 1.36 million in April, but are 0.7% below a year ago. The median price in the Midwest was $194,500, up 7.8% from a year ago. Existing-home sales in the South in fell 5.0% to an annual rate of 2.30 million, but are still 3.6% above April 2016. The median price in the South was $217,700, up 7.9% from a year ago. Existing-home sales in the West declined 3.3% to an annual rate of 1.18 million in April, but are still 3.5% above a year ago. The median price in the West was $358,600, up 6.8% from April 2016.
Total housing inventory at the end of April climbed 7.2% to 1.93 million existing homes available for sale, but is still 9.0% lower than a year ago (2.12 million) and has fallen year-over-year for 23 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.6 months a year ago.
“Realtors continue to voice the frustration their clients are experiencing because of the insufficient number of homes for sale,” added Yun. “Homes in the lower- and mid-market price range are hard to find in most markets, and when one is listed for sale, interest is immediate and multiple offers are nudging the eventual sales prices higher.”
Properties typically stayed on the market for 29 days in April, which is down from 34 days in March and 39 days a year ago, and surpasses last May (32 days) as the shortest time frame since NAR began tracking in May 2011.
Short sales were on the market the longest at a median of 88 days in April, while foreclosures sold in 46 days and non-distressed homes took 28 days. 52% of homes sold in April were on the market for less than a month (a new high).
Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in April were San Jose-Sunnyvale-Santa Clara, Calif., 23 days; San Francisco-Oakland-Hayward, Calif., 25 days; Denver-Aurora-Lakewood, Colo., 27 days; and Seattle-Tacoma-Bellevue, Wash., 28 days.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage declined for the first time in six months, dipping to 4.05% in April from 4.20% in March. The average commitment rate for all of 2016 was 3.65%.
“Mortgage rates have been stuck in a holding pattern in recent months, which is a relief for spring home buyers,” said Yun. “With price growth showing little sign of slowing, prospective first-time buyers will be the most sensitive to any sudden uptick in rates in the months ahead.”
Matching the highest percentage since last September, first-time buyers were 34% of sales in April, which is up from 32% both in March and a year ago. NAR’s 2016 Profile of Home Buyers and Sellers – released in late 2016 – revealed that the annual share of first-time buyers was 35%.
President William E. Brown, a Realtor® from Alamo, California, says it’s not only prospective homebuyers who are facing housing issues; many middle-income homeowners who benefit from the mortgage interest deduction could be slapped with a tax increase if some of the tax reform proposals currently being discussed go through. A recently released study commissioned by NAR titled, “Impact of Tax Reform Options on Owner-Occupied Housing,” estimated taxes would rise on average by $815 each year for homeowners with adjusted gross incomes between $50,000 and $200,000. Furthermore, home values could shrink by an average of more than 10%, with areas with higher property taxes or state income taxes experiencing an even steeper decline.
“Realtors support tax reform, but any plan that effectively nullifies the current tax benefits of owning a home is a non-starter for the roughly 75 million homeowners and countless prospective first-time buyers that see owning a home as part of their American Dream,” said Brown.
All-cash sales were 21% of transactions in April, down from 23% in March and 24% a year ago. Individual investors, who account for many cash sales, purchased 15% of homes in April, unchanged from March but up from 13% a year ago. 57% of investors paid in cash in April. Distressed sales – foreclosures and short sales – were 5% of sales in April, down from 6% in March and 7% a year ago. 3% of April sales were foreclosures and 2% were short sales. Foreclosures sold for an average discount of 18% below market value in April (16% in March), while short sales were discounted 12% (14% in March).
