Home Sales Cooled Off This Spring
Home Sales Cooled Off This Spring
Existing-home sales slowed in April, with all major regions of the country – except the Midwest – experiencing declines as buyer demand continues to far exceed the number of homes for-sale, according to the National Association of REALTORS® latest housing report.
Total existing-home sales – reflecting completed transactions for single-family homes, townhomes, condos, and co-ops – fell 3.3 percent to a seasonally adjusted annual rate of 5.04 million in April, NAR reports. Despite the dip, sales are about 6 percent above year ago levels.
April sales failed to keep the robust gain seen in March, says Lawrence Yun, NAR’s chief economist
"April's setback is the result of lagging supply relative to demand and the upward pressure it's putting on prices," Yun says. "However, the overall data and feedback we're hearing from REALTORS® continues to point to elevated levels of buying interest compared to a year ago. With low interest rates and job growth, more buyers will be encouraged to enter the market unless prices accelerate even higher in relation to incomes."
Here's a closer look at how existing-home sales fared across the country in April:
- Northeast: sales declined 3.1 percent to an annual rate of 620,000, but are 1.6 percent above a year ago. Median price: $253,200, up 3.6 percent compared to April 2014.
- Midwest: sales increased 1.7 percent to an annual rate of 1.22 million in April, and are 13 percent above April 2014. Median price: $173,700, up 11.4 percent from a year ago.
- South: sales decreased 6.8 percent to an annual rate of 2.04 million in April, but are still 3.6 percent above April 2014. Median price: $189,400, up 8.5 percent from a year ago.
- West: decreased 1.7 percent to an annual rate of 1.16 million in April, but are still 6.4 percent above a year ago. Median price: $318,700, which is 10 percent above April 2014.
But the limited for-sale inventories may continue to hold back sales.
"Housing inventory declined from last year and supply in many markets is very tight, which in turn is leading to bidding wars, faster price growth and properties selling at a quicker pace," says Yun. "To put it in perspective, roughly 40 percent of properties sold last month went at or above asking price, the highest since NAR began tracking this monthly data in December 2012."
Market Snapshot for April
Inventories: For-sale inventories rose 10 percent at the end of April to 2.21 million existing homes for-sale. Inventories are still 0.9 below year ago levels and are at a 5.3-month supply at the current sales pace.
Home prices: The median existing-home price for all housing types was $219,400 in April – 8.9 percent above last year. This marks the largest percentage gain in home prices since January 2014.
Days on the market: Properties sold faster in April, averaging 39 days. That is the fastest since July 2013 (which was 42 days) and the second shortest time (37 days in June 2013) since NAR began tracking such data in May 2011. What’s more, nearly half of the homes on the market sold for less than a month in April. Broken out, short sales were on the market the longest at a median of 180 days; foreclosures sold in 50 days; and non-distressed homes took 38 days.
Distressed sales: Foreclosures and short sales made up 10 percent of home sales in April, below the 15 percent share a year ago. In April, 7 percent of sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 20 percent below market value, while short sales were discounted on average 14 percent.
All-cash sales: The number of transactions that involved all-cash were 24 percent in April, unchanged from March but down significantly from a year ago when all-cash sales comprised 32 percent of transactions. Individual investors who account for the bulk of cash sales purchased 14 percent of homes in April, down from 18 percent a year ago. Seventy-one percent of investors paid cash in April, according to NAR.