April Buyers Chafe at Supply Constraints


Existing home sales declined 2.3% in April as inventory fell year-over-year for the 23rd consecutive month, while the velocity of sales increased to the highest level since the National Association of Realtors (NAR) began tracking the monthly sales timeframe.  At the current sales rate, the April unsold inventory represents a 4.2-month supply, up from the March 3.8-month supply, but down from a 4.6-month supply a year ago. April existing sales remain up 1.6% from the same month a year ago, and reached a seasonally adjusted rate of 5.57 million compared to a downwardly revised 5.70 million in March. Total existing home sales include single-family homes, townhomes, condominiums and co-ops.

April existing sales increased 3.8% in the Midwest, but declined 2.7% in the Northeast, 3.3% in the West and 5.0% in the South. Year-over-year, the South and West were up by 3.6% and 3.5% respectively, while the Midwest and Northeast were down by 0.7% and 2.7% respectively.

Although total housing inventory increased 7.2% in April, inventory remained 9.0% below the level a year ago. Homes stayed on the market for only 29 days in April, down from 34 days in March and 39 days during the same month a year ago. Representing a new high, some 52% of homes sold in April were on the market less than a month.

The April first-time home buyer share increased to 34%, up from 32% in March and a year ago. NAR also reported that the 2016 annual first-time buyer share was 35%.

The April all-cash sales share decreased to 21%, down from 23% in March and 24% a year ago.  Individual investors purchased a 15% share in April, unchanged from March, but up from a 13% share a year ago. Some 57% of investors paid cash in April, down from 63% of investors in March and 71% of investors in February.

The April median sales price jumped 6.0% from last year to $244,800, representing the 62nd consecutive month of year-over-year increases. The April median condominium/co-op price of $234,600 was up 5.6% from the same month a year ago.

Pending sales dipped 0.8% last month, so the pause in existing sales was not unexpected. New home sales grew 11.3% over the past year, and both jobs and incomes continue to grow, suggesting an improving market for new single-family construction.

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