Previously US-owned home sales unexpectedly fell for a third straight month in April as an inventory crisis hit prices the hardest and held back purchases.
Contracts closed down 2.7% month-on-month to an annualized 5.85 million, the slowest pace since June, according to the National Association of Realtors data on Friday. The median forecast in a Bloomberg poll of economists put a rate of 6.07 million in April.
Increased asking prices, reflecting a limited number of homes in the market, decrease affordability and limit sales. Still, the pace of existing property sales is above pre-pandemic levels, supported by historically low borrowing costs.
The median sales price rose 19.1% year over year to $ 341,600 in April. Both the annual increase and the average prices were records.
The fall in April sales "was due to the shortage of houses in the market," NAR chief economist Lawrence Yun told reporters. "Even if home sales are falling slightly, the market can be described as hot."
At the end of last month there were 1.16 million homes for sale, a 20.5% decrease from the previous year. At the current rate, it would take 2.4 months to sell all of the homes in the market. A year ago it was 4 months. Brokers see anything under five months as a sign of a tight market.
Homes and condos can be seen in this aerial photo taken Tuesday September 1, 2020 of a Lennar Corp. development. in San Diego, California, USA Interest rates continued to drive a residential real estate market, which is a major source of fuel for economic recovery. Photographer: Bing Guan / Bloomberg
Bing Guan / Bloomberg
Despite the decline in April, the real estate market remains robust. On average, properties stayed in the market for a record low of 17 days in April. Half of the homes listed are selling above asking price, Yun said, while 88% of properties purchased have been on the market for less than a month.
Another sign of the competitive nature of the real estate market was an increase in the proportion of houses bought in cash transactions. A quarter of properties acquired in April were in cash, up from 15% in the previous year.
Previously owned single-family home sales fell 3.2% month-on-month to 5.13 million. Condominium purchases rose 1.4%. Three out of four regions saw sales declines in April, led by a 3.9% decline in the Northeast and a 3.7% decline in the South. Deals fell 3.1% in the West and rose 0.8% in the Midwest. Existing home sales make up approximately 90% of US homes and are calculated when a contract is signed. The new build sales that make up the rest are based on contract signing and will take place next Tuesday