Sales of existing homes fall as inventory woes continue
Sales of previously owned homes fell in April to a three-month low as lean inventory continued to stand in the way of further progress while driving up prices, National Association of Realtors data showed.
Contract closings fell 2.5% month-over-month to a 5.46 million annual rate (the estimate was 5.55 million) from an unrevised 5.6 million. The median sales price rose 5.3% year-over-year to $257,900. Inventory of available properties declined 6.3% year-over-year to 1.8 million.
A limited number of properties on the market helped contribute to the year-over-year gain in prices and dissuaded potential buyers. The lack of supply has been persistent even as job gains and a general improvement in the economy keeps demand elevated.
The market now has to contend with rising interest rates. The average fixed rate on a 30-year mortgage stands at 4.66%, the highest in seven years, according to Freddie Mac data.
In a sign of resilient demand, properties typically stayed on the market for 26 days in April, down from 29 days a year ago. Fifty-seven percent of homes sold were on the market for less than a month.
Existing-home sales account for 90% of the market and are calculated when a contract closes. New-home sales, considered a timelier indicator though their share is only about 10%, are tabulated when contracts get signed.
"We are seeing no breakout in home sales," Lawrence Yun, NAR's chief economist, said at a press briefing accompanying the report. "We are stuck in this narrow range at a time when the economy is doing well."
"However, inventory shortages are even worse than in recent years and home prices keep climbing above what many home shoppers can afford," Yun said in a statement.
Purchases fell in three of four regions, including a 2.9% decline in the South and a 3.3% drop in the West. At the current pace, it would take 4 months to sell the homes on the market, compared to 3.5 months in March. The Realtors' group considers less than a five-month supply as consistent with a tight market.
Single-family home sales decreased 3% last month to an annual rate of 4.84 million. Purchases of condominium and co-op units rose 1.6% to a 620,000 pace. First-time buyers made up 33% of all sales in April, compared with 34% a year ago.