April Existing Home Sales: Demand Outweighing Supply

• April existing home sales fell 2.7% from March according to the National Association of Realtors, to 5.85 million (SAAR), the third consecutive monthly decline. Sales were up 33.9% from the pandemic-influenced April 2020.
• The median price of an existing home rose 19.1% year-over-year to $341,600.
• NAR's measure of inventory showed the number of homes available for sale up 10.5% from March but down 20.5% from April 2020.

Red hot housing competition stoked in part by low mortgage rates, demographic factors and an improving economy is pushing home prices up at their strongest pace in decades, with sales happening at lightning speed and often for well above list price. But signs are emerging that this elevated level of competition may be starting to wear on buyers’ confidence and could be holding back sales volumes somewhat. Last month, existing home sales recorded their best bottom line in any April since 2006, but the slight decrease from March marked the third consecutive monthly decline. The combination of rising prices and limited inventory may be starting to weigh on buyers, particularly lower-income households and first-time home shoppers who have a more difficult time saving increasingly lofty down payments. Recent buyer sentiment data showed that more people thought it was a bad time to buy a home than a good one. But while buyer sentiment may be starting to waver, sellers appear to be growing more confident -- a key development on the road back to a more balanced market that may be somewhat easier on buyers. New listings volume got a decent bump in March and April, and more people believe it’s a good time to sell a home than at any time since the pandemic began. While what people say is far different than what they do, any indications of an uptick in home inventory are a welcome sign in a market where supply is struggling to keep up with red hot demand.