It appears that the housing market may have finally turned the corner—that is, if you believe the National Association of Realtors.
NAR Tuesday morning reported that sales of existing homes rose 3.4% in April to a seasonally adjusted annual rate of 4.62 million units. The comparison is to March, a month in which the trade group revised sales downward to 4.47 million units. Compared to the same month a year ago, existing home purchases were up 10%.
Homebuyers continue to enjoy record-low mortgage rates where some consumers can take out a 30-year fixed-rate loan at 3.5% depending on the points paid.
Another factor benefiting the market is that in some regions buying a home is now cheaper than renting.
Distressed homes—foreclosures and short sales sold at deep discounts—accounted for 28% of April sales: 17% were foreclosures, 11% were short sales, down from 29% in March, and 37% in April 2011. Foreclosures sold for an average discount of 21% below market value in April, the trade group said.
NAR chief economist Lawrence Yun declared that the housing recovery is underway. “It is no longer just the investors who are taking advantage of high affordability conditions,” he said in a statement. “A return of normal home buying for occupancy is helping home sales across all price points, and now the recovery appears to be extending to home prices.”
Yun went so far to say that in some cities it’s now a “seller’s market.”
The national median existing-home price for all housing types jumped 10.1% to $177,400 in April from a year ago. “This is the first time we’ve had back-to-back price increases from a year earlier since June and July of 2010 when the gains were less than one percent,” Yun said.
Total housing inventory at the end of April rose 9.5% to 2.54 million existing units available for sale, a seasonal increase which represents a 6.6-month supply at the current sales pace, up from a 6.2-month supply in March.
NAR said listed inventory is 20.6% below a year ago when there was a 9.1-month supply.
Diminishing share of foreclosed property sales is helping home values, the trade group said, adding that an “acute shortage” of inventory in certain markets is leading to multiple biddings and escalating prices.
Regions where tight supplies have been reported include Washington, D.C.; Naples, Fla.; North Dakota; Phoenix; Orange County, Calif.; and Seattle.