Existing home sales increased 1.3% in April, but fell 6.8% from the same period a year ago. The National Association of Realtors (NAR) reported April 2014 total existing home sales at a seasonally adjusted rate of 4.65 million units combined for single-family homes, townhomes, condominiums and co-ops, up from 4.59 million units in March.
The West and South increased by 4.9% and 1.0% respectively in April, the Northeast remained unchanged, and the Midwest decreased 1.0% from the previous month. Year-over-year, all regions decreased, ranging from a 3.5% drop in the South to a 10.0% decrease in the West. Seasonally adjusted condominium and co-op sales increased 7.3% in April, and were unchanged from the same period a year ago.
First-time buyers comprised 29% of April 2014 sales, down from 30% in March and were unchanged from last April. The January first-time buyer share of 26% was the lowest since NAR began reporting that share monthly in October 2008. The historical average first-time buyer share is about 40%. Tight lending conditions continue to buffet first-time buyers despite reports of easing standards.
Total housing inventory leaped 16.8% in April to 2.29 million existing homes. At the current sales rate, the April 2014 inventory represents a 5.9-month supply, up from a 5.1-month supply in March and up from a 5.2-month supply a year ago. Continuing a positive note, NAR also reported that the April median time on market for all homes was 48 days, down from 55 days in March but up from 43 days during the same month a year ago. NAR reported that 41% of homes sold in April were on the market less than a month, compared to 37% of all homes sold in March.
The share of distressed sales ticked up to 15% in April from 14% in March, but was down from 18% in April 2013. Distressed sales are defined as foreclosures and short sales sold at deep discounts. All cash sales comprised 32% of April transactions, down from 33% in March, and unchanged from the same period a year ago. Individual investors purchased an 18% share in April, up from 17% in March but down from 19% during the same period a year ago. Some 70% of April investors paid cash, virtually unchanged from 71% last month.
The April median sales price for existing homes of all types increased to $201,700 from the downwardly revised March median sales price of $196,700 and was up 5.2% from a year ago. The median condominium/co-op price increased again to $205,500 in April, up from a downwardly revised $198,300 in March and was up 8.3% from April 2013.
The Pending Home Sales Index increased 3.4% in March, the first increase since June 2013. Therefore, it was expected that April existing home sales would respond with a modest increase. Despite the slight increase in the April investor share, higher existing home prices make these homes less appealing for investors, and a future withdrawal of that demand will take some steam out of existing sales. The increased inventory of existing homes coupled with increased new home construction will expand choices for first-time buyers, the missing link in this housing recovery.
While existing home sales struggled through a sub-par first quarter, new home sales continue to post year-over-year gains (also tempered by recent weather impacts) as investor activity cools. The April new home sales numbers will be released tomorrow.