(Newsroom America) -- Stubbornly low supply levels held down existing-home sales in April and also pushed the median number of days a home was on the market to a new low of 29 days, according to the National Association of Realtors.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, dipped 2.3 percent to a seasonally adjusted annual rate of 5.57 million in April from a downwardly revised 5.70 million in March. Despite last month's decline, sales are still 1.6 percent above a year ago and at the fourth highest pace over the past year.
Lawrence Yun, NAR chief economist, says every major region except for the Midwest saw a retreat in existing sales in April.
"Last month's dip in closings was somewhat expected given that there was such a strong sales increase in March at 4.2 percent, and new and existing inventory is not keeping up with the fast pace homes are coming off the market," he said.
"Demand is easily outstripping supply in most of the country and it's stymieing many prospective buyers from finding a home to purchase."
The median existing-home price for all housing types in April was $244,800, up 6.0 percent from April 2016 ($230,900). April's price increase marks the 62nd straight month of year-over-year gains.
Total housing inventory at the end of April climbed 7.2 percent to 1.93 million existing homes available for sale, but is still 9.0 percent lower than a year ago (2.12 million) and has fallen year-over-year for 23 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.6 months a year ago.
"Realtors® continue to voice the frustration their clients are experiencing because of the insufficient number of homes for sale," added Yun. "Homes in the lower- and mid-market price range are hard to find in most markets, and when one is listed for sale, interest is immediate and multiple offers are nudging the eventual sales prices higher."
Properties typically stayed on the market for 29 days in April, which is down from 34 days in March and 39 days a year ago, and surpasses last May (32 days) as the shortest timeframe since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 88 days in April, while foreclosures sold in 46 days and non-distressed homes took 28 days. Fifty-two percent of homes sold in April were on the market for less than a month (a new high).
Inventory data from realtor.com reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in April were San Jose-Sunnyvale-Santa Clara, Calif., 23 days; San Francisco-Oakland-Hayward, Calif., 25 days; Denver-Aurora-Lakewood, Colo., 27 days; and Seattle-Tacoma-Bellevue, Wash., 28 days.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage declined for the first time in six months, dipping to 4.05 percent in April from 4.20 percent in March. The average commitment rate for all of 2016 was 3.65 percent.
"Mortgage rates have been stuck in a holding pattern in recent months, which is a relief for spring homebuyers," said Yun. "With price growth showing little sign of slowing, prospective first-time buyers will be the most sensitive to any sudden uptick in rates in the months ahead."
Matching the highest percentage since last September, first-time buyers were 34 percent of sales in April, which is up from 32 percent both in March and a year ago. NAR's 2016 Profile of Home Buyers and Sellers – released in late 20164 – revealed that the annual share of first-time buyers was 35 percent.
President William E. Brown, a Realtor® from Alamo, California, says it's not only prospective homebuyers who are facing housing issues; many middle-income homeowners who benefit from the mortgage interest deduction could be slapped with a tax increase if some of the tax reform proposals currently being discussed go through. A recently released study commissioned by NAR titled, "Impact of Tax Reform Options on Owner-Occupied Housing," estimated taxes would rise on average by $815 each year for homeowners with adjusted gross incomes between $50,000 and $200,000. Furthermore, home values could shrink by an average of more than 10 percent, with areas with higher property taxes or state income taxes experiencing an even steeper decline.
"Realtors support tax reform, but any plan that effectively nullifies the current tax benefits of owning a home is a non-starter for the roughly 75 million homeowners and countless prospective first-time buyers that see owning a home as part of their American Dream," said Brown. Thousands of Realtors® took this message to Capitol Hill last week during NAR's annual legislative meetings in Washington, D.C.
All-cash sales were 21 percent of transactions in April, down from 23 percent in March and 24 percent a year ago. Individual investors, who account for many cash sales, purchased 15 percent of homes in April, unchanged from March but up from 13 percent a year ago. Fifty-seven percent of investors paid in cash in April.
Distressed sales5 – foreclosures and short sales – were 5 percent of sales in April, down from 6 percent in March and 7 percent a year ago. Three percent of April sales were foreclosures and 2 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in April (16 percent in March), while short sales were discounted 12 percent (14 percent in March).
Single-family and Condo/Co-op Sales
Single-family home sales decreased 2.4 percent to a seasonally adjusted annual rate of 4.95 million in April from 5.07 million in March, but are still 1.6 percent above the 4.87 million pace a year ago. The median existing single-family home price was $246,100 in April, up 6.1 percent from April 2016.
Existing condominium and co-op sales declined 1.6 percent to a seasonally adjusted annual rate of 620,000 units in April, but are still 1.6 percent higher than a year ago. The median existing condo price was $234,600 in April, which is 5.6 percent above a year ago.
April existing-home sales in the Northeast dipped 2.7 percent to an annual rate of 730,000, and are now 2.7 percent below a year ago. The median price in the Northeast was $267,700, which is 1.6 percent above April 2016.
In the Midwest, existing-home sales increased 3.8 percent to an annual rate of 1.36 million in April, but are 0.7 percent below a year ago. The median price in the Midwest was $194,500, up 7.8 percent from a year ago.
Existing-home sales in the South in fell 5.0 percent to an annual rate of 2.30 million, but are still 3.6 percent above April 2016. The median price in the South was $217,700, up 7.9 percent from a year ago.
Existing-home sales in the West declined 3.3 percent to an annual rate of 1.18 million in April, but are still 3.5 percent above a year ago. The median price in the West was $358,600, up 6.8 percent from April 2016.