US home sales maintain recent momentum, up 6% from April 2015

Image Despite ongoing inventory shortages and faster price growth, existing home sales in the United States have sustained their recent momentum and moved higher for the second consecutive month.

The latest data from the National Association of Realtors shows a surge in sales in the Midwest and a decent increase in the Northeast which offset smaller declines in the South and West.

Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, rose 1.7% to a seasonally adjusted annual rate of 5.45 million in April from an upwardly revised 5.36 million in March. After last month’s gain, sales are now up 6% from April 2015.

According to Lawrence Yun, NAR chief economist, April’s sales increase signals slowly building momentum for the housing market this spring. ‘Primarily driven by a convincing jump in the Midwest, where home prices are most affordable, 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,’ he said.

‘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,’ he added.

The NAR data also shows that the median existing home price for all housing types in April was $232,500, up 6.3% from April 2015 and this is the 50th consecutive month of year on year gains.

Total housing inventory at the end of April increased 9.2% to 2.14 million existing homes available for sale, but is still 3.6% lower than a year ago. Unsold inventory is at a 4.7 month supply at the current sales pace, up from 4.4 months in March. 

‘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 explained.

Properties typically stayed on the market for 39 days in April compared to 47 days in March, which is unchanged from a year ago but the shortest duration since June 2015 when it was 34 days.

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. Some 45% of homes sold in April were on the market for less than a month, the highest since June 2015 when it was 47%.

‘Looking ahead, with demand holding steady and supply levels still far from sufficient, the market for entry level and mid-priced homes will likely continue to be the most competitive heading into the summer months,’ Yun explained.
The index show that the share of first time buyers was 32% in April, up from 30% both in March and a year ago. First time buyers in all of 2015 also represented an average of 30%.

All cash sales were 24% of transactions in April, down from 25% in March and unchanged from a year ago. Individual investors, who account for many cash sales, purchased 13% of homes in April, matching the lowest share since October 2015, but down from 14% in both in March and a year ago while 69% of investors paid cash in April.

Distressed sales, that is foreclosures and short sales, declined for the second straight month to 7% in April, down from 8% last month and 10% a year ago. Some 5% of April sales were foreclosures and 2% were short sales. Foreclosures sold for an average discount of 17% below market value in April compared to 16% in March, while short sales were discounted 10%, unchanged from March.

Single family home sales were up 0.6% to a seasonally adjusted annual rate of 4.81 million in April from 4.78 million in March, and are now 6.2% higher than the 4.53 million pace a year ago. The median existing single family home price was $233,700 in April, up 6.2% from April 2015.

Existing condominium and co-op sales jumped 10.3% to a seasonally adjusted annual rate of 640,000 units in April from 580,000 in March, and are now 4.9% above April 2015. The median existing condo price was $223,300 in April, which is 6.8% above a year ago.

A breakdown of the data shows that April existing home sales in the Northeast climbed 2.8% to an annual rate of 740,000, and are now 17.5% above a year ago. The median price in the Northeast was $263,600, which is 4.1% above April 2015.

In the Midwest, existing home sales soared 12.1% to an annual rate of 1.39 million in April, and are now 12.1% above April 2015. The median price in the Midwest was $184,200, up 7.7% from a year ago.

Existing home sales in the South declined 2.7% to an annual rate of 2.19 million in April, but are still 4.3% above April 2015. The median price in the South was $202,800, up 6.5% from a year ago.

Existing home sales in the West decreased 1.7% to an annual rate of 1.13 million in April, and are 3.4% lower than a year ago. The median price in the West was $335,000, which is 6.5% above April 2015.


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BDC 305 Jun 2023