Limited inventory and tight credit constrained existing home sales in April. Learn more about these and other real estate market trends.
Sales of existing homes rose 0.6 percent in April despite strong demand as limited inventory and tight credit constrained buying, according to the latest real estate market trends published today by the National Association of Realtors.
Sales took place at the seasonally adjusted annual rate of 4.97 million in April, a rate 9.7 percent higher than the 4.53 million pace set in April 2012 and a sign of a solid market recovery, according to Lawrence Yun, the association’s chief economist.
“The robust housing market recovery is occurring in spite of tight access to credit and limited inventory. Without these frictions, existing-home sales easily would be well above the 5-million unit pace,” Yun said in a statement analyzing the latest real estate market trends. “Buyer traffic is 31 percent stronger than a year ago, but sales are running only about 10 percent higher. It’s become quite clear that the only way to tame price growth to a manageable, healthy pace is higher levels of new home construction.”
Confidence among home builders rose in April. Learn more about the latest real estate market trends from the National Association of Home Builders by clicking here.
Despite the headwinds, the pace of existing home sales is the highest it’s been since November 2009 when the home buyer tax credit spurred transactions to an annual rate of 5.44 million, according to the association. Existing home sales reflect completed purchases of single-family homes, townhomes, condominiums and co-ops. In other positive real estate market trends, sales have posted annual gains for 22 consecutive months, and prices have gained year-over-year for 14 consecutive months. The national median existing home price rose 11 percent year-over-year in April to $192,800.
Construction activity slowed in April, but the rate of new building permits issued was up. Click here to learn more about real estate market trends reported last week by the Commerce Department.
Total housing inventory at the end of April was enough to supply the market for just over five months at the current sales pace, up from a 4.7-month supply in March, according to the association. Foreclosures and short sales accounted for a smaller share of total sales in April, falling to 18 percent from 21 percent in March and 28 percent in April 2012. The median time on market for all homes was 46 days in April, down from 62 days in March and 83 days in April. First-time buyers accounted for 29 percent of April’s purchases, and 32 of the transactions were paid in cash.
More information on real estate market trends will be available tomorrow when the Federal Housing Finance Agency reports House Price Index numbers for March and the Commerce Department releases data on new home sales for April.