Prices Strong Despite Lockdowns Hindering April Sales
May 21, 2020
The latest existing-home sales numbers show a housing market facing the headwinds of the COVID-19 pandemic in April. Existing-home sales fell 17.8% last month compared to March, marking a two-month decline in sales, the National Association of REALTORS® reported Thursday.
Still, home prices remain resilient in the face of the pandemic. The median existing-home price for all housing types in April jumped 7.4% compared to a year ago ($286,800). All four major regions of the U.S. saw annual gains in home prices, too.
But total existing-home sales—which are completed transactions that include single-family homes, townhomes, condos, and co-ops—fell to a seasonally adjusted annual rate of 4.33 million in April. Sales were down 17.2% compared to a year ago (5.23 million existing-home sales in April 2019). Existing-home sales are at the lowest level since July 2010
“The economic lockdowns—occurring from mid-March through April in most states—have temporarily disrupted home sales,” says Lawrence Yun, NAR’s chief economist. “But the listings that are on the market are still attracting buyers and boosting home prices.”
Record low mortgage rates likely will be a key factor in driving housing demand as state economies gradually reopen, Yun adds. “Still, more listings and increased home construction will be needed to tame price growth,” he notes.
Here is an overview of additional key indicators from NAR’s latest housing report:
- Inventory: Total housing inventory at the end of April was 1.47 million units, down 19.7% from a year ago. Unsold inventory is currently at a 4.1-month supply at the current sales pace.
- Days on the market: Properties typically stayed on the market for 27 days in April, up from 24 days a year ago. Fifty-six percent of homes sold in April were on the market for less than a month.
- First-time home buyers: More sales last month were from buyers who were purchasing their first home. First-time buyers accounted for 36% of sales in April, up from 32% a year ago.
- All-cash sales: All-cash sales comprised 15% of transactions in April, down from 20% a year ago. Individual investors and second-home buyers, who make up the biggest bulk of cash sales, purchased 10% of homes in April, down from 16% in April 2019.
- Distressed sales: Foreclosures and short sales represented 3% of sales in April, which is about the same as a year ago.
The following is a closer look at how existing-home sales fared across the country in April:
- Northeast: Existing-home sales dropped 16.9% in April to an annual rate of 540,000—an 18.2% decrease compared to a year ago. Median price: $312,500, up 8.7% from April 2019.
- Midwest: Existing-home sales fell 12% to an annual rate of 1.10 million—an 8.3% decrease compared to a year ago. Median price: $229,200, a 9.3% increase compared to April 2019.
- South: Existing-home sales dropped 17.9% to an annual rate of 1.88 million in April, down 16.8% from the same time a year ago. Median price: $249,400, a 6.4% increase compared to April 2019.
- West: Existing-home sales dropped 25% to an annual rate of 810,000 in April—a 27% decrease compared to April 2019. Median price: $419,300, up 6.1% from a year ago.
Updated: July 31, 2020