U.S. existing homes were selling at the fastest pace on record in April. Unfortunately, there were not enough for sale, according to the National Association of Realtors (NAR).
Existing homes sales declined over the month, even as consumers were fighting over a limited supply on the market. Sales fell to an annualized pace of 5.57 million in April, down 2.3 percent from a strong March reading of 5.7 million. The April pace was 1.6 percent above the level a year earlier, but sales would likely be higher if not for a tight market that has limited choices, the trade group said.
cashout(1)The median time that homes stayed on the market fell five days to a new low of 29 days, an indicator of heavy demand, NAR said. The trade group began tracking the pace of sales in May 2011, and the previous low was last May’s figure of 32 days.
“Last month’s dip in closings was somewhat expected given that there was such a strong sales increase in March at 4.2 percent, and new and existing inventory is not keeping up with the fast pace homes are coming off the market,” NAR Chief Economist Lawrence Yun said.
“Demand is easily outstripping supply in most of the country and it’s stymieing many prospective buyers from finding a home to purchase,” Yun said.
Homes were selling the fastest in the metros where prices are the highest, including San Jose, California, 23 days; San Francisco, 25 days; Denver, 27 days; and Seattle, 28 days.
Home inventories at 1.93 million did rise over the month by 7.2 percent. Normally home inventories increase in April. On a year-over-year basis, the inventory is down 9 percent compared to a year ago. Inventories have fallen year-over-year for 23 consecutive months.
Home prices also continue to move up. The median price in April was $244,800, up 6 percent from April 2016.
Lower sales of existing homes followed Tuesday’s disappointing April reading from the U.S. Census Bureau on new-home sales. New-home sales fell 11.4 percent over the March level to 569,000 unit, but were essentially flat year over year. .
Danielle Hale, NAR’s managing director of Housing Research, said she expects both readings to improve over the next few months. She noted that the new-homes sales reading tends to be volatile, and the lower mortgage rates of the last month should help bolster existing home sales.
“Inventory continues to be a problem in the existing housing market,” Hale told Scotsman Guide News. “There are two ways to fix it. Investors can either offload properties or we can see more construction being built, and I think new construction seems to be the more likely way that this will resolve itself.”