The National Association of Realtors released their Existing Home Sales report last week for the month of April. It showed that closings on existing homes fell 1.9% which represents an annualized pace of 4.14 million units. When compared to this time last year they dipped 1.9% as well.
Even though there was a drop, home sales are hanging in there considering the rise in rates from February to April. Since then, rates have come down, which may lead to some stronger sales in the upcoming monthly reports.
Inventory of existing homes increased 9% month-over-month to 1.21 million units, which should help add to an already very limited supply, and this could lead to more future sales. Inventory is now up 16% from the same time last year. There is a 3.5-month supply of homes, which is tight but up from 3.2 months. 4 to 5 months is considered more normal.
On the demand side of things, we see that homes remained on the market for only 26 days on average, down from 33 days in March. First-time homebuyers accounted for 33% of sales, which is up sharply from 32% in the previous report. Cash buyers accounted for 28% of sales, unchanged from March. Investors made up 16%, up from 15% in last month’s report. Investors clearly see the value in investing in real estate. Lastly, almost 1 in 3 homes sold above list price!
As you can see there was a slight dip in existing home sales, but again it was during a month with higher interest rates and tighter inventory. Going forward rates are improving and demand is still very hot which will support home pricing.
Source : mbshighway.com
By: Jon Iacono