Existing home sales have failed to gain much traction in the past month, according to a new report from the National Association of Realtors released last week.
The NAR said that total existing home sales for April, which includes all transactions involving single-family homes, townhomes, condos and co-ops, fell by 2.5 percent to a seasonally adjusted annual rate of 5.46 million in April. That means sales are 1.4 percent lower than one year ago, and marks the second month in succession in which sales have fallen on an annual basis.
The NAR’s chief economist Lawrence Yun said we can pin the blame firmly on the lack of inventory of available homes to buy.
“The root cause of the underperforming sales activity in much of the country so far this year continues to be the utter lack of available listings on the market to meet the strong demand for buying a home,” Yun said. “Realtors say the healthy economy and job market are keeping buyers in the market for now even as they face rising mortgage rates. However, inventory shortages are even worse than in recent years, and home prices keep climbing above what many home shoppers are able to afford.”
What little inventory is available is selling rapidly, and often at above list price, the NAR said. It cited its most recent data, which reveals a median home price for all housing types in April of $257,900, up 5.3 percent from one year ago.
With regard to inventory, this did at least increase somewhat by 9.8 percent to 1.80 million homes for sale throughout the country. However, inventory is still down 6.3 percent compared to one year ago, standing at a four-month supply at the current pace of sales. The average home stayed on the market for an average of just 26 days in April, down from 29 days in April 2017. Some 57 percent of listed homes were sold within less than a month, the NAR said.
“What is available for sale is going under contract at a rapid price,” Yun said. “Since NAR began tracking this data in May 2011, the median days a listing was on the market was at an all-time low in April, and the share of homes sold in less than a month was at an all-time high.”
The NAR’s latest report also put all cash transactions at 21 percent of sales, which is unchanged from a year ago. Most of these cash sales involve housing investors, who purchased 15 percent of all homes in the last month.
As for distressed sales, which includes foreclosures and short sales, we’re seeing far less of these. They made up just 3.5 percent of all April sales, which is down 5 percent from a year ago and the lowest percentage since the NAR began tracking this data in October 2008.