Existing-Home Sales Decline 2.7 Percent in April
Existing-home sales waned in April, marking three straight months of declines, according to the National Association of Realtors®. All but one of the four major U.S. regions witnessed month-over-month drops in home sales, but each registered double-digit year-over-year gains for April.
Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, slipped 2.7 percent from March to a seasonally-adjusted annual rate of 5.85 million in April. Sales overall jumped year-over-year, up 33.9 percent from a year ago (4.37 million in April 2020).
“Home sales were down again in April from the prior month, as housing supply continues to fall short of demand,” said Lawrence Yun, NAR’s chief economist. “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.
“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 percent compared to 2020,” Yun continued. “The additional supply projected for the market should cool down the torrid pace of price appreciation later in the year.”
The median existing-home price2 for all housing types in April was $341,600, up 19.1 percent from April 2020 ($286,800), as every region recorded price increases. This is a record high and marks 110 straight months of year-over-year gains.
Total housing inventory3 at the end of April amounted to 1.16 million units, up 10.5 percent from March’s inventory and down 20.5 percent from one year ago (1.46 million). Unsold inventory sits at a 2.4-month supply at the current sales pace, slightly up from March’s 2.1-month supply and down from the 4.0-month supply recorded in April 2020. These numbers continue to represent near-record lows. NAR first began tracking the single-family home supply in 1982.
Properties typically remained on the market for 17 days in April, down from 18 days in March and from 27 days in April 2020. Eighty-eight percent of the homes sold in April 2021 were on the market for less than a month.
First-time buyers were responsible for 31 percent of sales in April, down from 32 percent in March and 36 percent in April 2020. NAR’s 2020 Profile of Home Buyers and Sellers – released in late 20204 – revealed that the annual share of first-time buyers was 31 percent .
“First-time buyers in particular are having trouble securing that first home for a multitude of reasons, including not enough affordable properties, competition with cash buyers and properties leaving the market at such a rapid pace,” Yun said.
Individual investors or second-home buyers, who account for many cash sales, purchased 17 percent of homes in April, up from 15 percent in March and 10 percent in April 2020. All-cash sales accounted for 25 percent of transactions in April, up from both 23 percent in March and 15 percent in April 2020.
Distressed sales5 – foreclosures and short sales – represented less than 1 percent of sales in April, equal to March’s percentage but down from 3 percent in April 2020.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.06 percent in April, down from 3.08 percent in March. The average commitment rate across all of 2020 was 3.11 percent . Yun expects the 30-year fixed-rate mortgage to remain below 3.5 percent in 2021.
Single-family and Condo/Co-op Sales
Single-family home sales dropped to a seasonally-adjusted annual rate of 5.13 million in April, down 3.2 percent from 5.30 million in March, and up 28.9 percent from one year ago. The median existing single-family home price was $347,400 in April, up 20.3 percent from April 2020.
Existing condominium and co-op sales were recorded at a seasonally-adjusted annual rate of 720,000 units in April, up 1.4 percent from March and up 84.6 percent from one year ago. The median existing condo price was $300,400 in April, an increase of 12.6 percent from a year ago.
“The demand for homeownership in America is as strong as it’s ever been, and NAR continues working with policymakers across the country to find solutions to the issues we face in our industry,” said NAR President Charlie Oppler, a Realtor® from Franklin Lakes, N.J., and the CEO of Prominent Properties Sotheby’s International Realty. “Ultimately, though, buyers still recognize that securing a home is one of the best ways to build long-term wealth, and Realtors® continue their work to make that dream a reality for families everywhere.”
Realtor.com’s Market Hotness Index, measuring time-on-the-market data and unique viewers per property, revealed that the hottest metro areas as of May 13 were Manchester, N.H.; Concord, N.H.; Lafayette, Ind.; Janesville, Wis.; and Elkhart, Ind.
Only the Midwest experienced higher sales from the prior month, but each of the four major U.S. regions recorded year-over-year increases.
Existing-home sales in the Northeast fell 3.9 percent from March, but the annual rate of 730,000 represents a 30.4 percent leap from a year ago. The median price in the Northeast was $381,100, up 22.0 percent from April 2020.
Existing-home sales in the Midwest grew 0.8 percent to an annual rate of 1,290,000 in April, a 13.2 percent increase from a year ago. The median price in the Midwest was $259,300, a 13.5 percent rise from April 2020.
Existing-home sales in the South decreased 3.7 percent , recording an annual rate of 2,600,000 in April, up 39.0 percent from the same time one year ago. The median price in the South was $289,600, a 15.8 percent jump from one year ago.
Existing-home sales in the West declined 3.1 percent from the month prior, posting an annual rate of 1,230,000 in April, a 53.8 percent surge from a year ago. The median price in the West was $501,200, up 19.9 percent from April 2020.
The National Association of Realtors is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.