Despite Tight Credit and Inventories, Existing Home Sales and Prices Continue Recovery

Existing home sales remain constrainedrnby limited inventory and tight credit but still managed to eke out a smallrnincrease in April the National Association of Realtors® (NAR) said today.  Total existing home sales rose 0.6 percent torna seasonally adjusted annual rate of 4.97 million in April from 4.94 million inrnMarch.  The March number reflects arnsubstantial upward revision from the 4.92 million pace originally reported.  Existing home sales in April were 9.7 percentrnhigher than the 4.53 million sales rate one year earlier.</p

Existing home sales in April were at the<bhighest pace since the homebuyer tax credits caused the market to spike in Novemberrn2009 to a pace of 5.44 million units.  Existing home sales and home prices have beenrnabove year-ago levels for 22 and 14 consecutive months respectively.  The last time there were 14 consecutive monthsrnof year-over-year price increases was from April 2005 to May 2006.    </p

Total existing home sales are completedrntransactions of single-family homes, townhomes, condominiums and cooprnapartments.  Single family sales were uprn1.2 percent in April to 4.38 million annual sales from 4.33 million in March (revisedrnfrom 4.32 million) and were 9.0 percent higher than in April 2012.  Existing condo and coop sales were down,rnhowever to an annualized rate of 590,000 units from 610,000 in March, a -3.3rnpercent change.  April condo sales werern15.7 percent higher than a year earlier. </p

Existing Home Sales</p

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Lawrence Yun, NAR chief economist, said the market is solidlyrnrecovering.  “The robust housing market recovery is occurring in spite ofrntight access to credit and limited inventory.  Without these frictions,rnexisting-home sales easily would be well above the 5-million unit pace,” hernsaid.  “Buyer traffic is 31 percent stronger than a year ago, but salesrnare running only about 10 percent higher.  It’s become quite clear thatrnthe only way to tame price growth to a manageable, healthy pace is higherrnlevels of new home construction.”</p

Inventory did rise in April, up 11.9 percent from March to 2.16 millionrnexisting available homes.  Thisrnrepresents a 5.2 month supply compared to a 4.7 month supply in March.  The inventory is still 13.6 percent lowerrnthan in April 2012 when there was a 6.6 month supply.  NAR said inventories are particularly tightrnin the lower price ranges. </p

The national median existing-home price for all housing types was $192,800rnin April, up 11.0 percent from April 2012.  The median existingrnsingle-family home price was $193,300 which is 11.0 percent above a year agornand the median existing condo price was $189,500, 11.3 percent above the pricernin April 2012.</p

The market share of foreclosures andrnshort sales dropped from 21 percent in March to 18 percent in April, sevenrnpoints below a year earlier.  Elevenrnpercent of April sales were foreclosures, and 7 percent were short sales. rnForeclosures sold for an average discount of 16 percent below market value inrnApril, while short sales were discounted 14 percent.</p

The median time on market for all homes was 43 days in April, down sharplyrnfrom 62 days in March, and is 48 percent faster than the 83 days on market inrnApril 2012.  The median is being pulledrnup by short sales which took 73 days to close while non-distressed sales tookrn44 days and foreclosures 43.  Forty-four percent of all homes sold in Aprilrnwere on the market for less than a month, while only 8 percent were on thernmarket for a year or longer.</p

First-time buyers accounted for 29 percent of purchases in April, comparedrnwith 30 percent in March and 35 percent in April 2012 while investors purchasedrn19 percent of homes during the month, the same as the month before and down onernpercentage point from a year earlier. rnCash sales, which tend to be investor transactions, represented 32rnpercent of sales compared to 30 percent both in March and in April 2012.</p

Sales activity varied on a regional basis but all regions of the countryrnposted strong price increases, up by double digits in two of the four regions.  Existing homes sales rose 1.6 percent in the Northeastrnon a monthly basis and 4.9 percent annually. rnThe median price in the Northeast was $245,100, up 5.1 percent from arnyear ago.</p

Sales were down by 3.4 percent month-over-month in the Midwest but were uprn9.8 percent year-over-year.  The medianrnprice rose 6.7 percent to $149,300. </p

In the South, existing-home sales rose 2.0 percent in April and were 14.9rnpercent above April 2012 sales.  The median price in the South wasrn$168,700, which is 10.6 percent above a year ago.</p

The West saw sales rise 1.7 percent from March and 4.3 percent from thernprior year.  Inventories have been persistentlyrntight in the region and partially account for the 17.5 percent annual pricernincrease there, to a median price of $263,600.

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