Existing home sales, as reported by the National Association of Realtors (NAR), fell for the second straight month in April as the coronavirus pandemic shut down much of the country’s economic activity and hit the labor market.
Total existing home sales, which includes single-family homes, townhomes, condominiums and co-ops, dropped 17.8% to a seasonally adjusted annual rate (SAAR) of 4.33 million in April, the lowest level since July 2010. The April decline was also the largest monthly decline since July 2010. Sales were 17.2% lower than a year ago.
The first-time buyer share rose to 36% in April from 34% last month and 32% a year ago. The April inventory level decreased to 1.47 million units from 1.49 million units in March and from 1.83 million units a year ago.
At the current sales rate, the April unsold inventory represents a 4.1-month supply, up from 3.4 months in March but down from a 4.2 months a year ago.
Homes stayed on the market for an average of 27 days in April, down from 29 days last month but up from 24 days a year ago. In April, 56% of homes sold were on the market for less than a month.
All-cash sales accounted for 15% of transactions in April, down from 19% last month and 20% a year ago.
Despite the steep monthly decline in sales, home prices remained strong. The April median sales price of all existing homes was $286,800, up 7.4% from a year ago, representing the 98th consecutive month of year-over-year increases. The median existing condominium/co-op price of $267,200 in April was up 7.1% from a year ago.
All regions saw a double-digit decline in existing home sales over the month, ranging from 12.0% in the Midwest to 25.0% in the West. On a year-over-year basis, sales declined in all four regions as well, with the West seeing the greatest drop (27.0%). However, median home prices grew from a year ago in each region.
This month’s decline is not surprising as most states began shutting down economies in mid-March, which temporarily disrupted home sales. However, builder confidence increased seven points to 37 in May, indicating that the housing market is stabilizing and gradually moving forward in the wake of the coronavirus pandemic.
Meanwhile, mortgage rates are expected to remain at record low for the rest of year, which helps sustain demand and entice homebuyers, but more listings and home construction are needed to meet the rising demand.