First American Financial Corporations’ Potential Home Sales Model found potential existing-home sales fell to a seasonally-adjusted 4.68 million. This fall translates to a 5.1% month-over-month decline.
This statistic is 39.4% higher than the market potential low point that was seen in the month of February in 1993. Likewise, when compared to just one year ago, April’s statistics for market potential regarding existing-home experienced a fall of 12.6%, signifying a loss of roughly seasonally adjusted 670,000 sales.
As of today’s market, the potential existing-home sales is around 2 million. This statistic is actually 30.4% less than the recession’s peak that was reported in March 2004.
First American Chief Economist Mark Fleming commented on how he sees the coronavirus affecting the market: "The coronavirus pandemic continued its historic assault on the domestic and global economy in April, and the housing market did not go unscathed. Typically, the hot spring home-buying season would be in full swing in April, but pandemic-related impacts, including shelter-in-place orders, the rapid surge in unemployment, and declining consumer confidence chilled a promising spring for the housing market.”
Fleming then added details to paint a vivid picture of the pandemic’s aftermath: ”Our Potential Home Sales Model reflects the significant impact of the pandemic on the market potential for existing-home sales, which fell to the lowest level since August 2012. Housing market potential decreased 5.1% in April relative to the previous month, and fell 12.6% year-over-year, a decline of 672,230 (SAAR) potential existing-home sales.”
He continued his explanation: ”Credit tightening remained the largest drag on housing market potential for the second month in a row. However, rising tenure length is a growing headwind for housing market potential as well, as potential sellers keep their homes off the market during this period of uncertainty.”
A report by Redfin states that homes for sale in April fell 22.5% annually. Also declining were the share of new homes for sales (-42.4%) and the number of homes available for sales (-24.5%).
Home prices were up from the year prior, but the rate of growth in the U.S. median home-sale price fell slightly to 4.9% annually. This is down from 6.9% in March. The average sale price in April was $303,895.