Existing Home Sales Post Third Monthly Loss in April
Existing home sales posted their third monthly loss in April, falling 2.7 percent compared
to sales in March. The National Association of Realtors® (NAR) said
seasonally adjusted sales of single-family homes, townhouses,
condominiums, and cooperative apartments were at a rate of 5.85 million
units compared to 6.01 million the prior month. The annual rate has
declined from 6.66 million in January, the last time sales were up.
April's rate was 33.9 percent higher than the 4.37 million pace in April
2020, but that was amid COVID-19 related business closures.
Sales
came in below even the lowest estimate (5.9 million) of analysts polled
by Econoday. Their consensus was for a slight month-over-month uptick
to a rate of 6.085 million units.
Single-family home sales
dropped to a seasonally-adjusted annual rate of 5.13 million, a 3.2
percent monthly decline, but were up 28.9 percent from a year earlier.
Existing condominium and co-op sales did rise, up 1.4 percent to a
720,000 unit rate.
"Home sales were down again in April from
the prior month, as housing supply continues to fall short of demand,"
said Lawrence Yun, NAR's chief economist. "We'll see more inventory come
to the market later this year as further COVID-19 vaccinations are
administered and potential home sellers become more comfortable listing
and showing their homes. The falling number of homeowners in mortgage
forbearance will also bring about more inventory.
"Despite the
decline, housing demand is still strong compared to one year ago,
evidenced by home sales from this January to April, which are up 20
percent compared to 2020," Yun continued. "The additional supply
projected for the market should cool down the torrid pace of price appreciation later in the year."
The
median existing-home price for all housing types in April was $341,600,
up 19.1 percent from the April 2020 median of $286,800. This is a
record high and marks 110 straight months of year-over-year gains. The
median existing single-family home price was $347,400, an annual gain of
20.3 percent while condo prices were up 12.6 percent to a median price
of $300,400.
Inventory, while still near historic lows, did rise by 10.5 percent during
the month to 1.16 million units. This is estimated at a 2.4 month
supply at the current rate of sales. The March supply was 2.1 months and
a year earlier, when there were 1.46 million homes available for sale,
the supply was 4.0 months.
Properties typically remained on the
market for 17 days in April, down from 18 days in March and from 27 days
in April 2020. Eighty-eight percent of the homes sold in April 2021
were on the market for less than a month.
First-time buyers were
responsible for 31 percent of sales in April, compared to 36 percent in
April 2020. Yun commented, "First-time buyers in particular are having
trouble securing that first home for a multitude of reasons, including
not enough affordable properties, competition with cash buyers and
properties leaving the market at such a rapid pace."
Individual
investors or second-home buyers, who account for many cash sales,
purchased 17 percent of homes in April, up from 15 percent in March and
10 percent in April 2020. All-cash sales accounted for 25 percent of
transactions in April 10 points more than in April 2020. Distressed
sales - foreclosures and short sales - accounted for less than 1 percent
of the month's sales.
"The demand for homeownership in America
is as strong as it's ever been, and NAR continues working with
policymakers across the country to find solutions to the issues we face
in our industry," said NAR President Charlie Oppler. "Ultimately,
though, buyers still recognize that securing a home is one of the best ways to build long-term wealth, and Realtors continue their work to make that dream a reality for families everywhere."
Of
the four major regions, only the Midwest experienced higher sales than
during the prior month. Those sales, at an annual rate of 1.29 million,
were up 0.8 percent from March and 13.2 percent year-over-year. The
median price in the Midwest was $259,300, a 13.5 percent annual gain.
Existing-home
sales in the Northeast fell 3.9 percent for the month, but the annual
rate of 730,000 units is a 30.4 percent leap from a year ago. The median
price was $381,100, a 22.0 percent rate of appreciation.
Sales
in the South decreased 3.7 percent, to a rate of 2,6 million, a 39.0
percent improvement from a year earlier. The median price jumped 15.8
percent to $289,600.
The West saw sales down 3.1 percent
month-over-month at 1.230 million. Still, this was a 53.8 percent surge
compared to April 2020. The median price in the West was $501,200, an
annual increase of 19.9 percent.