April Existing Home Sales: Slow Burn
Existing home sales seemed to defy gravity in recent months, but historically tight inventory is finally catching up with the market and is now very clearly weighing on sales.
- Existing home sales fell more sharply than expected in April, dropping 2.3 percent from March to 5.57 million units at a seasonally adjusted annual rate (SAAR).
- The number of homes on the market fell 2.65 percent in April, more than erasing the slight increase reported in March and the lowest number of homes on the market on record, March 2000 aside.
- The median price of existing homes sold in March increased 0.35 percent from March to $244,450, a new all-time high.
Existing home sales fell short of expectations in April, falling 2.3 percent from March to 5.57 million units at a seasonally adjusted annual rate (SAAR) according to the National Association of Realtors (NAR). After seeming to defy gravity in recent months – existing home sales had beat forecasts in five of the previous seven months leading into April – historically tight inventory is finally catching up with the market and is now very clearly weighing on sales.
Regionally, existing home sales have now declined for three consecutive months in the Western region, where inventory constraints are most acute, the longest streak of month-over-month declines since late 2013. There was also a sharp drop in existing home sales in the South in April, where home sales fell by 110,000 units (SAAR) – down 5.1 percent from March– to 2.03 million units. However, some of this was likely a retreat from exceptionally strong sales in the region in March.
For-sale inventory – the number of homes on the market – fell 2.65 percent in April to 1.84 million units (SAAR) and is down almost 9 percent over the year. Compared to March, there were 50,000 fewer homes on the market in April and 181,000 fewer homes on the market compared to this time last year. With the number of new homes on the market essentially unchanged in April, there was no net gain in inventory for home shoppers gearing up for the traditional spring and early summer home shopping season.
The median seasonally-adjusted price of existing homes sold in April was $244,450, up 0.35 percent from March, up 5.9 percent from a year ago, and a new all-time high.
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