April Existing Home Sales Up but Constrained

WASHINGTON — May 22, 2013 — Existing-home sales rose in April but remain below underlying demand because of limited inventory and tight credit, according to the National Association of Realtors.  All regions are showing strong price gains from a year ago.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 0.6 percent to a seasonally adjusted annual rate of 4.97 million in April from an upwardly revised 4.94 million in March.  Resale activity is 9.7 percent above the 4.53 million-unit level in April 2012.

Lawrence Yun, NAR chief economist, said the market is solidly recovering.  “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,” he said.  “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.”

Existing-home sales are at the highest pace since November 2009 when the market spiked to 5.44 million in response to the home buyer tax credit.  Total sales have been above year-ago levels for 22 consecutive months, while prices show 14 consecutive months of year-over-year price increases.

Total housing inventory at the end of April rose 11.9 percent, a seasonal increase to 2.16 million existing homes available for sale, which represents a 5.2-month supply at the current sales pace, compared with 4.7 months in March.  Listed inventory is 13.6 percent below a year ago, when there was a 6.6-month supply, with current availability tighter in the lower price ranges.

The national median existing-home price for all housing types was $192,800 in April, up 11.0 percent from April 2012.  The last time there were 14 consecutive months of year-over-year price increases was from April 2005 to May 2006.

Distressed homes – foreclosures and short sales – accounted for 18 percent of April sales, down from 21 percent in March and 28 percent in April 2012.  Eleven percent of April sales were foreclosures, and 7 percent were short sales.  Foreclosures sold for an average discount of 16 percent below market value in April, while short sales were discounted 14 percent.

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