A sizable drop in mortgage interest rates did not contribute much to helping home sales in April, as high prices and a shortage of supplies at the lower end of the market remained on the margins of buyers.
Sales of existing homes in the US UU They fell by 0.4% in April compared to March at a seasonally adjusted annual rate of 5.19 million units, according to the National Association of Realtors. Sales were 4.4% lower compared to April 2018. That was the 14th consecutive month of annual falls.
Existing sales represent approximately 90% of the total sales market, as new construction continues to fall behind historically normal production levels. The NAR reading counts closed sales, reflecting that buyers signed contracts in February and March. The average rate for the 30 years fixed was drastically reduced in March, so the expectation was a profit in sales, but the chief economist of the Realtors said he is not worried.
"First, we are seeing historically low mortgage rates combined with an accumulated demand to buy, so buyers will seek to take advantage of these conditions," said Lawrence Yun of NAR. "In addition, job creation is improving, which makes wage growth align with the growth in house prices, which helps affordability and will help boost more home sales."
The average price of an existing home sold in April, including single-family homes and condominiums, was $ 267,300, an annual increase of 3.6%. Prices have been gaining year after year for 86 consecutive months. However, profits have been declining since last summer, as more inventory hits the market. However, they overheated dramatically in recent years, and some of the major metropolitan markets are still overvalued and prohibitive for entry-level buyers.
The inventory of existing homes for sale increased to 1.83 million, an annual 1.7% to a 4.2 month supply at the current rate of sales. The houses were placed on the market for an average of 24 days in April, less than the 36 days of March and less than the 26 days of the previous year. A little more than half of the houses sold in April were in the market for less than a month.
"We see that the inventory totals have constantly improved and will provide more options for those looking to buy a house," Yun said, adding that sellers should realize that price growth has moderated. "When placing their house in the market, the sellers of houses must be very realistic and aware of the current conditions."
While there are more homes on the market, part of the increase is simply that it is generally slow to sell homes. As they sit in the market, the supply increases. However, the new offer is not changing future sales forecasts.
"Our outlook for the housing market remains virtually unchanged," wrote Sam Khater, chief economist at Freddie Mac, in a monthly report. "We still expect housing and housing sales to begin to be more solid in the coming months due to favorable market conditions and the rapid growth of salaries."
Regionally, home sales in the Northeast decreased 4.5% to an annual rate of 640,000. The average price in the northeast was $ 277,700, 0.9% more than in April 2018.
In the Midwest, sales of existing homes did not experience a percentage change relatively to the previous month, as the annual rate remained at 1.17 million, which is 7.9% below the levels of April 2018. The average price in the Midwest it was $ 210,500, an increase of 5.5% over the previous year.
Sales of existing homes in the south fell by 0.4% at an annual rate of 2.27 million, 1.7% less than a year ago. The average price in the South was $ 236,800, 4.4% more than a year ago.
Sales of existing homes in the West increased 1.8% to an annual rate of 1.11 million in April, 5.9% below the previous year. The average price in the West was $ 395,100, 1.3% more than in April 2018.