Existing-home sales fell 17.8% month-over-month in April to an adjusted rate of 4.33 million, according to the National Association of Realtors (NAR).
April’s report represents the lowest level of sales since July 2010 (3.45 million) and the largest monthly drop since July 2010 (-22.5%).
Sales fell annually by 17.2% (5.23 million in April 2019).
“The economic lockdowns—occurring from mid-March through April in most states—have temporarily disrupted home sales,” said Lawrence Yun, NAR’s Chief Economist. “But the listings that are on the market are still attracting buyers and boosting home prices.”
The median existing-home price for all housing in April rose 7.4% to $286,800, with prices rising in every region. April’s price increase is the 98th straight month of annual gains.
“Record-low mortgage rates are likely to remain in place for the rest of the year, and will be the key factor driving housing demand as state economies steadily reopen,” Yun said. “Still, more listings and increased home construction will be needed to tame price growth.”
April’s housing inventory totaled 1.47 million units, which is down 1.3% from March and down 19.7% from April 2019. Unsold inventory is at 4.1-month supply at the current pace, which is an increase from last months’ 3.4-months.
Holden Lewis, Home and Mortgage Expert, NerdWaller, said home sellers are now “more reluctant” than buyers to close a deal during COVID-19.
“Today's home buyers are chasing a dwindling number of homes for sale, and that's why prices are rising. There is demand among buyers, but they're just aren't enough homes on the market,” he said.
Realtor.com’s Chief Economist, Danielle Hale, said April’s report is a reversal from February’s, which detailed the pace of sales were at a 13-year high.
“Because the home buying process takes time—a sale generally takes a month or two after the home is found—we expect home sales to linger around low levels again in May before starting to show signs of recovery later in summer as consumers venture back out. Purchase mortgage applications are almost back to levels seen a year ago, a sign that the housing market could regain some of its momentum seen earlier in the year,” she said.
Hale added that the question is whether sellers will return to the market so buyers have options to choose from.
“Confidence surveys show that many believe it is not a good time to sell, and our weekly data shows fewer sellers putting homes on the market than a year ago. But, the gap between this year and last year is decreasing, a hopeful sign that seller confidence is on the mend,” Hale said.