Sales rose in April by 1.3 percent over March, a weak tick upward at the height of the traditional sales season. Sales reached an annual rate of 4.65 million units, marking only the second increase in sales in nine months, short by 6.8 percent from a year ago.
The April sales disappointed economists who had expected 4.68 million sales. Sales were down 15 percent from a peak of 5.38 million units hit in July, reported the National Association of Realtors.
Expensive home loans and rising home prices have sidelined first-time buyers from the market. Investors are stepping back.
Lawrence Yun, NAR chief economist, said. “Annual home sales, however, due to a sluggish first quarter, will likely be lower than last year.”
Total housing inventory at the end of April jumped 16.8 percent to 2.29 million existing homes available for sale, which represents a 5.9-month supply at the current sales pace, up from 5.1 months in March. Unsold inventory is 6.5 percent higher than a year ago, when there was a 5.2-month supply.
The median existing-home price3 for all housing types in April was $201,700, which is 5.2 percent above April 2013; in the first quarter the median price was 8.6 percent above 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 said.
Earlier this month, NAR reported the market share of all-cash purchases has risen despite a downtrend in distressed home sales and investor activity. Distressed homes4 – foreclosures and short sales – accounted for 15 percent of April sales, down from 18 percent in April 2013.
Ten percent of April sales were foreclosures, and 5 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in April, while short sales were discounted 10 percent.
NAR President Steve Brown, co-owner of Irongate, Inc., Realtors® in Dayton, Ohio, said 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 said. “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 inventory of unsold homes on the market increased 6.5 percent from a year-ago and the median home price increased at its slowest pace since March 2012. The months’ supply increased to 5.9 months, the highest since August 2012, from 5.1 months in March. Six months’ supply is normally considered as a healthy balance between supply and demand.