Existing-Home Sales Up, Despite Challenges
May 20, 2016
Existing-home sales continue to be on the upswing, despite ongoing inventory shortages and escalating home prices, the National Association of REALTORS® reported Friday. Sales increases in the Midwest and Northeast regions helped to offset declines in the South and West last month.
The following is a closer look at how existing-home sales performed across the country in April:
- Northeast: existing-home sales rose 2.8 percent to an annual rate of 740,000, and are 17.5 percent above a year ago. Median price: $263,600 -- 4.1 percent higher than a year ago.
- Midwest: Existing-home sales jumped 12.1 percent to an annual rate of 1.39 million in April, and are 12.1 percent higher than a year ago. Median price: $184,200, up 7.7 percent from April 2015.
- South: existing-home sales dropped 2.7 percent to an annual rate of 2.19 million in April, but remain 4.3 percent above April 2015. Median price: $202,800, up 6.5 percent from a year ago.
- West: existing-home sales fell 1.7 percent to an annual rate of 1.13 million in April, and are 3.4 percent lower than a year ago. Median price: $335,000, which is 6.5 percent above a year ago.
Existing-home sales increased 1.7 percent in April to a seasonally adjusted annual rate of 5.45 million. Sales are now up 6 percent compared to a year ago.
The uptick in sales last month nationwide was primarily driven by a sizable jump in the Midwest, “where home prices are most affordable,” says Lawrence Yun, NAR’s chief economist.
“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,” Yun says. “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.”
5 Stats to Gauge the Market
Here are some additional highlights from April’s housing report:
1. Home prices: The median existing-home price for all housing types in April was $232,500, a 6.3 percent increase from a year ago ($218,700).
2. Days on the market: Properties, on average, stayed on the market for 39 days in April (down from 47 days in March). That is the shortest time since June 2015, when homes were staying on the market an average of just 34 days. Forty-five percent of homes sold last month were on the market for less than a month. 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.
3. All-cash sales: All-cash sales comprised 24 percent of transactions in April, unchanged from a year ago. Individual investors make up the bulk of all-cash purchases. Investors purchased 13 percent of homes in April, which matches the lowest share since October 2015.
4. Distressed sales: Foreclosures and short sales dropped for the second consecutive month to 7 percent in April, down from 10 percent a year ago. Five percent of April sales were foreclosures and 2 percent were short sales. Foreclosures sold, on average, at a discount of 17 percent below market value in April, while short sales were discounted 10 percent.
5. Inventory levels: Total housing inventory at the end of April rose 9.2 percent to 2.14 million existing homes available for sale. Still, that is 3.6 percent lower than a year ago (2.22 million). Unsold inventory is at a 4.7-month supply at the current sales pace.
“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,” Yun says.
Updated: June 22, 2018