Existing-home sales in the United States increased to their best level in more than three years, but the housing market is still dependent on low interest rates and inventory levels.
On Wednesday, the National Association of Realtors announced that total existing-home sales, which are completed transactions that include single-family homes, town-homes, condos, and co-ops, increased 0.6 percent to a seasonally adjusted annual rate of 4.97 million units in April. In comparison, March showed an upwardly revised 4.94 million units.
Existing-home sales are up 9.7 percent from the 4.53 million-unit level seen in April 2012. Sales are at their highest level since the tax credit period of November 2009, when sales spiked to 5.44 million units. Total sales have now been above year-ago levels for 22 consecutive months.
Lawrence Yun, NAR chief economist, remains upbeat. He says, “The robust housing market recovery is occurring in spite of tight access to credit and limited inventory. Without these frictions, existing-home sales easily would be well above the 5 million unit pace. Buyer traffic is 31 percent stronger than a year ago, but sales are running only about 10 percent higher. It’s become quite clear that the only way to tame price growth to a manageable, healthy pace is higher levels of new home construction.”
Single-family home sales in April rose 1.2 percent to a seasonally adjusted annual rate of 4.38 million units, compared to 4.33 million units in March. On a regional basis, existing-home sales in the Midwest fell 3.4 percent. However, sales in the Northeast, South, and West increased 1.6 percent, 2.0 percent, and 1.7 percent, respectively.
Low inventory levels continue to support home prices. The national median existing-home price for all housing types jumped 11.0 percent to $192,800 in April, compared to a year earlier. This is the 14th consecutive month of year-over-year price gains. The last time this occurred was April 2005, during the housing bubble.
Total housing inventory at the end of April rose 11.9 percent to 2.16 million existing homes available for sale, representing a 5.2-month supply. This is above the 4.7-month supply in the previous month.
In a separate report from the Mortgage Bankers Association, loan application volume dropped 9.8 percent on a seasonally adjusted basis from one week earlier. This comes as the average interest rate for a 30-year fixed-rate mortgage climbed higher for the second consecutive week to reach 3.78 percent.
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