Existing-Home Sales and Prices Jump to Multiyear Highs

Existing-home sales rose 0.6% in April to an annual sales rate of 4.97 million, the highest level since November 2009, the National Association of Realtors reported Wednesday. Economists had expected a 1.6%  increase to 5.0 million from March’s original report of 4.92 million sales. March sales were adjusted upward to 4.94 million.

The median price of an existing single-family home jumped $8,900 in the month to $192,800, the highest since August 2008. The inventory of homes for sale rose to 2.17 million—its highest level since last September. The supply of homes for sale rose to 5.2 months, the highest since October.
Inventory has edged up consistent with the increase in the median price of an existing-home, which has increased in five of the last six months. The number and months supply of home for sale has gone up for three straight months. The monthly NAR report—which tracks closings—increased despite a drop in the NAR’s pending home sales index (PHSI) two months ago. The PHSI tracks contracts for sale. The increase in closings was consistent though with the improvement in builder confidence reported last week by the National Association of Home Builders, which said its Housing Market Index increased in May for the first time this year. Homebuilders reported an increase in buyer traffic meaning more people shopping for homes.
According to the NAR data, April home sales were up 9.7% over sales a year earlier, a slightly slower improvement than the 10.8% year-over-year gain reported for March. The median price also showed a modestly slower year-over-year gain, 11.0% for April, than recorded for March, 11.6%.
After falling to a cyclical low in August 2010, existing home sales had been improving steadily-helped by the federal homebuyer tax credit program until seeming to plateau since last November. Monthly sales since November have averaged 4,943,000, up from 4,657,000 in the preceding six months and 4,467,000 from November 2011 through April 2012. Although the sales pace fell short of forecasts, NAR Chief Economist Lawrence Yun described the housing results as “robust” and said the “market recovery is occurring in spite of tight access to credit and limited inventory.”

Distressed homes—foreclosures and short sales—accounted for 18% of April sales, down from 21% in March and 28% in April 2012, the NAR said. 11% of April sales were foreclosures, and 7% were short sales. Foreclosures sold for an average discount of 16% below market value in April, while short sales were discounted 14% compared with March when foreclosures sold for an average discount of 15% while short sales were discounted 13%. The smaller discounts for foreclosures and short sales in the last month suggests some market firming.
The median time on market for all homes was 46 days in April, down sharply from 62 days in March, and is 45% faster than the 83 days on market in April 2012, according to NAR. 44% of all homes sold in April were on the market for less than a month, while only 8% were on the market for a year or longer.
First-time buyers, the NAR said, accounted for 29% of purchases in April, compared with 30% in March and 35% in April 2012. All-cash sales were at 32% of transactions in April, up from 30% in March; they were 29% in April 2012.
Existing-home sales in the West increased 1.7% to a pace of 1.20 million in April and are 4.3% above a year ago. The median price of an existing home in the West rose to $263,600 in April, up 2.6% from March and 17.5% from April 2012.