Sales of existing U.S. home sales fell 3.3 percent in April, according to the National Association of Realtors, a product of tight inventory pushing home prices up, pricing many buyers out of the market.
“April’s setback is the result of lagging supply relative to demand and the upward pressure it’s putting on prices,” said NAR chief economist Lawrence Yun. “However, the overall data and feedback we’re hearing from Realtors® continues to point to elevated levels of buying interest compared to a year ago. With low interest rates and job growth, more buyers will be encouraged to enter the market unless prices accelerate even higher in relation to incomes.”
Total sales fell to a seasonally adjusted annual rate of 5.04 million in April, down from 5.21 million in March. Compared with one year earlier, sales were up 6.1 percent. And existing-homes sold at a record speed, selling in an average of 39 days on the market, the fastest pace in almost two years.
“Housing inventory declined from last year and supply in many markets is very tight, which in turn is leading to bidding wars, faster price growth and properties selling at a quicker pace,” said Yun. “To put it in perspective, roughly 40 percent of properties sold last month went at or above asking price, the highest since NAR began tracking this monthly data in December 2012.”
Inventory did rise in April, climbing 10.0 percent to 2.21 million existing properties for sale, which will likely help improve home sales in the current month. Inventory is still down 0.9 percent from the year before. At April’s sales pace, there was a 5.3-month supply of home on the market, up from 4.6-month supply in March.
The median home price for existing-homes rose to $219,400, an increase of 8.9 percent from April 2014 and the 38th straight month of year-over-year price gains.
Mortgage interest rates fell in April, according to Freddie Mac, with the average rate on a 30-year fixed rate conventional home loan dropping to 3.67 percent from 3.77 percent in March. Rates are expected to stay low through September, a condition that could aid home sales in the coming months if inventory continues to rise.