Existing home sales in April were down 1 percent on a seasonally adjusted basis from March according to figures released on Friday by the National Association of Realtors (NAR).
Existing homes, including single family residences, townhouses, condominiums, and co-ops sold at an annual rate of 4.89 million units in April. March figures had been adjusted upward from earlier estimates and NAR reported that homes had sold at a rate of 4.94 million units.
April's figures were 17.5 percent below the 5.93 million units reported in April 2007.
NAR blamed the April decline partly on restrictive lending practices but said that a greater number of areas are showing sales gains from one year ago.
Analysts were predicting that April sales would fall off 1.6 percent from March figures, so the actual decline could be considered a positive sign.
NAR President Richard F. Gaylord said the good news is that mortgage restrictions
have just been eased. 'In the past week, Freddie Mac and Fannie Mae announced that they were eliminating their 'declining market' policies, effective June 1,' he said. 'This means consumers across the country will have access to safe, affordable financing with downpayments of only 5 percent on most mortgages, with 100 percent financing available on some loan products, and we could see an upturn in home sales this summer.'
Lawrence Yun, NAR chief economist, said eliminating restrictive policies should be a big help to home buyers. 'I would encourage buyers who were disappointed by poor mortgage options to take another look at the market because the lending changes are significant,' he said. 'Also, a recent notable drop in interest rates on conforming jumbo loans will help consumers in high-cost markets like California and New York.'
The median price of existing homes was $202,300, 8.0 percent lower than in April 2007 when the median was $219,900. The NAR explained that pricing figures are somewhat distorted downward because the slowdown in sales is hitting high cost areas the hardest and thus sales are more concentrated in low- and moderate-priced areas.
The inventory of unsold houses is frequently cited by experts as key to a housing recovery and that variable does not seem to be improving. The number of homes available for sale in April was 10.5 percent higher than in March. 4.55 million homes were on the market which represents a 11.2 month supply at the current sales rate. The previous month there was a 10.0 month supply.
Condos and co-ops bore the brunt of the sales decline. The pace of single-family homes was off 0.5 percent to 4.34 million in April from 4.36 million in March and are 16.1 percent lower than the 5.17 million sales in April 2007. However, condo and co-op sales fell 5.2 percent to 550,000 units month-over-month and are down 27.9 percent below the 763,000 units sold one year ago.
The median price of single-family homes was $200,700 in April, 8.5 percent lower than one year earlier while condos and co-ops had a median price of $214,900, 3.7 percent lower than a year ago.