Housing shortage to blame, but economist expects more inventory to come later this year
Existing-home sales declined for the third consecutive month in April, according to the National Association of Realtors.
“Home sales were down again in April from the prior month, as housing supply continues to fall short of demand,” said NAR chief economist Lawrence Yun. “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.”
Total existing-home sales were down 2.7% from March to a seasonally adjusted annualized rate of 5.85 million. Despite the decline, sales were up 33.9% from a year ago (4.37 million in April 2020).
“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,” Yun said. “The additional supply projected for the market should cool down the torrid pace of price appreciation later in the year.”
The median existing-home price for all housing types rose 19.1% year over year to a record high of $341,600 – marking 110 straight months of annual gains. Total housing inventory grew 10.5% month over month to 1.16 million units but was down 20.5% from last year’s 1.46 million units. Meanwhile, unsold inventory was at a near-record low of 2.4-month supply.
Properties typically sat on the market for 17 days in April, down from 18 days in March and from 27 days in April 2020. Around 88% of the homes sold in April were on the market for less than a month, according to NAR.
Single-family home sales posted a 3.2% month-over-month drop, down to a seasonally adjusted annual rate of 5.13 million in April. The median existing single-family home price spiked 20.3% to $347,400 year over year.
Existing condominium and co-op sales were up 1.4% at an annualized rate of 720,000 units. The median existing condo price was recorded at $300,400, up 12.6% 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. “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.”
