Sales of existing homes rose for a second straight month in April, up 1.7% to an annual rate of 5.45 million, the National Association of Realtors reported Friday. That represented a gain of 6% over April of last year and reflected an upward revision of the March seasonally adjusted annual rate to 5.36 million.
Sales of existing single-family homes were up a more modest 0.6% to a seasonally adjusted annual rate of 4.81 million in April from 4.78 million in March, 6.2% higher than the 4.53 million pace a year earlier. The median existing single-family home price was $233,700 in April, up 6.2% from April 2015.
“Primarily driven by a convincing jump in the Midwest, where home prices are most affordable, sales activity overall was at a healthy pace last month as very low mortgage rates and modest seasonal inventory gains encouraged more households to search for and close on a home,” said Lawrence Yun, NAR chief economist. “Except for in the West – where supply shortages and stark price growth are hampering buyers the most – sales are meaningfully higher than a year ago in much of the country.”
The median existing-home price for all housing types in April was $232,500, up 6.3% from April 2015 ($218,700), the 50th consecutive month of year-over-year gains.
Total inventory increased 9.2% to 2.14 million existing homes available for sale, 3.6% lower than a year ago (2.22 million). Unsold inventory is at a 4.7-month supply at the current sales pace, up from 4.4 months in March.
“The temporary relief from mortgage rates currently near three-year lows has helped preserve housing affordability this spring, but there’s growing concern a number of buyers will be unable to find homes at affordable prices if wages don’t rise and price growth doesn’t slow,” said Yun.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage fell from 3.69 % in March to 3.61% in April, which is the lowest since May 2013 (3.54%). The average commitment rate for all of 2015 was 3.85%.
Properties typically stayed on the market for 39 days in April (47 days in March), which is unchanged from a year ago but the shortest duration since June 2015 (34 days). Short sales were on the market the longest at a median of 120 days in April, while foreclosures sold in 51 days and non-distressed homes took 37 days. Forty-five percent of homes sold in April were on the market for less than a month – the highest since June 2015 (47 percent).
“Looking ahead, with demand holding steady and supply levels still far from sufficient, the market for entry-level and mid-priced homes will likely continue to be the most competitive heading into the summer months,” said Yun.
The share of first-time buyers was 32% in April, up from 30%t both in March and a year ago. First-time buyers in all of 2015 also represented an average of 30%.
All-cash sales were 24% of transactions in April, down from 25% in March and unchanged from a year ago. Investors purchased 13% of homes in April (matching the lowest share since October 2015), down from 14% in both in March and a year ago. Sixty-nine percent of investors paid cash in April.
Distressed sales4 – foreclosures and short sales – declined for the second straight month to 7% in April, down from 8% the prior month and 10% a year earlier. 5% of April sales were foreclosures and 2% were short sales. Foreclosures sold for an average discount of 17% below market value in April (16% in March), while short sales were discounted 10% (unchanged from March).
Existing condominium and co-op sales jumped 10.3% to a seasonally adjusted annual rate of 640,000 units in April from 580,000 in March and are now 4.9% above April 2015 (610,000 units). The median existing condo price was $223,300 in April, which is 6.8 % above a year ago.
Existing-home sales in the Northeast climbed 2.8% to an annual rate of 740,000 and were 17.5% above a year ago. The median price in the Northeast was $263,600, up 4.1% from April 2015. In the Midwest, existing-home sales jumped 12.1% to an annual rate of 1.39 million in April, 12.1% above April 2015. The median price in the Midwest was $184,200, up 7.7% from a year earlier. The South declined 2.7% to an annual rate of 2.19 million in April, still 4.3% above April 2015. The median price in the South was $202,800, up 6.5% year-over-year. Existing-home sales in the West decreased 1.7% to an annual rate of 1.13 million in April, down 3.4% from a year earlier. The median price in the West was $335,000, up 6.5% from April 2015.