Two monthly housing reports which serve as a great gage to the turnover and sales of homes across the US are the New Homes Sales report and the Existing Home Sales Report. New Home Sales measures contracts on newly constructed homes where Existing Home Sales measures actual closings, not signed contracts, on the existing home inventory.
The latest New Home Sales report showed that contracts on newly constructed homes were down 6% in April. Even though this was a lower number, March’s number was higher, and February was about 1% lower. The median home price was $372,000, which is up 20% from this time last year and up 11% from the prior month. Since builders are pushing higher end homes, this pulls the median home price higher, since there are more sales in that segment of the market.
Existing Home Sales was full of data showing that closings on existing homes were down by 2.7% to 5.85 million for the month of April, but up by 33.9% year over year. First time home buyers decreased slightly to 31%, but is still strong considering the competition for lower end homes. Cash buyers increased from 23% to 25%. Investors purchased 17% of homes, which was up from 15%. Lastly, the median existing home price rose by 19.1% year over year to $341,600. Again, this tells us that less homes are selling on the lower end and more on the higher end. This certainly isn’t due to lack of demand, it is because of the severe lack of inventory.
Larry Yun, the National Association of Realtors’ Chief Economist, recently spoke on this and said, “Home sales were down again in April from the prior month, as housing supply continues to fall short of demand.” He continued, “We’ll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes. The falling number of homeowners in mortgage forbearance will also bring about more inventory. And despite the decline, housing demand is still strong compared to one year ago, evidenced by home sales from this January to April, which are up 20% compared to 2020.”