Home Sales, Inventories Reach a Turning Point?
May 23, 2014
Existing-home sales posted the first rise of the year in April as inventory levels of for-sale homes also showed improvement, the National Association of REALTORS® reports.
Existing-home sales rose 1.3 percent in April compared to March, reaching a seasonally adjusted annual rate of 4.65 million last month. Still, home sales are 6.8 percent below the 4.99 million-unit pace set in April 2013, NAR reports.
“Some growth was inevitable after subpar housing activity in the first quarter, but improved inventory is expanding choices and sales should generally trend upward from this point,” says Lawrence Yun, NAR’s chief economist. “Annual home sales, however, due to a sluggish first quarter will likely be lower than last year.”
An Overview of Key Indicators
Inventory levels: Housing inventories soared 16.8 percent in April, reaching a 5.9-month supply at the current sales pace. That is up from a 5.1-month supply in March. Unsold inventory is 6.5 percent higher than a year ago. “We’ll continue to see a balancing act between housing inventory and price growth, which remains stronger than normal simply because there have not been enough sellers in many areas,” Yun says. “More inventory and increased new-home construction will help to foster healthy market conditions.”
Home prices: The median existing-home price was $201,700 in April – 5.2 percent higher than year ago levels. “Current price data suggests a trend of slower growth, which bodes well for preserving favorable affordability conditions in much of the country,” Yun says.
Distressed sales: The decrease continues in distressed homes, which includes foreclosures and short sales. Distressed homes accounted for 15 percent of April sales, down from 18 percent a year ago, NAR reports. Broken out, in April, 10 percent of sales were foreclosures and 5 percent were short sales.
Time on the market: For the fourth consecutive month, homes sold faster. Four out of 10 homes nationwide sold in less than a month in April. The median time on the market for all homes was 48 days in April, down from 55 days in March.
Across the U.S., here’s how existing-home sales and prices fared in April:
- Northeast: unchanged in April compared to March, holding at an annual rate of 600,000, but down 6.3 percent compared to year ago levels. Median price: $244,000, down 0.4 percent from a year ago.
- Midwest: dropped 1 percent in April to a 1.03 million pace, and are 9.6 percent below year ago levels. Median price: $157,200, which is 5.8 percent higher than April 2013 levels.
- South: rose 1 percent to an annual level of 1.94 million in April, but remain 3.5 percent below year ago levels. Median price: $173,200, up 3.2 percent from April 2013 levels.
- West: rose 4.9 percent to a 1.08 million pace in April, but are 10 percent below year ago levels. Median price: $291,200, up 9.7 percent from April 2013.
Updated: November 20, 2018