The sale of existing homes declined 2.5 percent in April after seeing a brief upward movement in the previous two months according to the latest existing-home sales data released by the National Association of Realtors (NAR) on Thursday.
Total existing-home sales, which are completed transactions for single-family homes, townhomes, condominiums, and co-ops, decreased to a seasonally adjusted annual rate of 5.46 million in April, down from 5.6 million in March, the report indicated. On a year-over-year basis, home sales fell for two straight months and were 1.4 percent below a year ago in April according to NAR. Additionally, this slump in sales was felt across all the four U.S. regions covered by NAR, thanks to the “staggeringly low inventory levels,” according to Lawrence Yun, Chief Economist, NAR.
“The root cause of the underperforming sales activity in much of the country so far this year continues to be the utter lack of available listings on the market to meet the strong demand for buying a home,” he said.
The report noted that though total housing inventory at the end of April increased 9.8 percent to 1.80 million homes available for sale, it was still 6.3 percent lower than the level of 1.92 million recorded a year ago and had fallen for 35 consecutive months. Unsold inventory was at a four-month supply at the current pace of sales, compared to 4.2 months a year ago during the same period.
“What is available for sale is going under contract at a rapid pace,” Yun said. “Since NAR began tracking this data in May 2011, the median days a listing was on the market was at an all-time low in April, and the share of homes sold in less than a month was at an all-time high.”
While the median price for existing homes this April rose 5.3 percent to $257,900 from $245,000 in April 2017, the report indicated that properties stayed on the market for an average of 26 days in April. This was lower than 30 days recorded in February this year and 29 days during the same period a year ago. The report said that 57 percent of homes sold in April were on the market for less than a month.
“With mortgage rates and home prices continuing to climb, an increase in housing supply is absolutely crucial to keeping affordability conditions from further deterioration,” Yun said. “The current pace of price appreciation far above incomes is not sustainable in the long run.”