After a slow start this year, sales of existing U.S. homes finally made some forward progress in April, according to the National Association of Realtors, as inventory jumped and prices moderated.
Total existing-home sales rose 1.3 percent to a seasonally adjusted annual rate of 4.65 million last month, up from 4.59 million in March. Compared with last year at the same time, sales are down 6.8 percent though.
A major jump in available inventory helped home prices to grow at a more relaxed pace in April. There were 2.29 million homes for sales last month, a 16.8 percent leap from March. At the current sales pace that represents a 5.9-month supply of homes. The NAR considers a 6.0-month supply to be well balanced between buyers and sellers. April is the first time inventory has come even close to that 6.0-month supply mark in over a year.
That increase in the number of available homes meant less competition between buyers and the median home floated up to $201,700, from $196,700 in March and up 5.2 percent from April 2013. Foreclosures and short sales continued to make up a considerable share of home sales though. In April, 10 percent of all sales were foreclosures and five percent were short sales. Those discounted properties tend to bring down overall prices as well.
“Some growth was inevitable after sub-par housing activity in the first quarter, but improved inventory is expanding choices and sales should generally trend upward from this point,” said NAR chief economist Lawrence Yun in a press release. “Annual home sales, however, due to a sluggish first quarter, will likely be lower than last year.”
He added, “Current price data suggests a trend of slower growth, which bodes well for preserving favorable affordability conditions in much of the country.”
Low interest rates are also adding to affordability. Freddie Mac reported that the average rate on a 30-year fixed rate, conventional mortgage was unchanged from March at 4.34 percent. Of course interest rates were significantly lower a year ago at 3.45 percent.