Existing home sales posted their third monthly loss in April, falling 2.7 percent compared to sales in March. The National Association of Realtors® (NAR) said seasonally adjusted sales of single-family homes, townhouses, condominiums, and cooperative apartments were at a rate of 5.85 million units compared to 6.01 million the prior month. The annual rate has declined from 6.66 million in January, the last time sales were up. April's rate was 33.9 percent higher than the 4.37 million pace in April 2020, but that was amid COVID-19 related business closures.
Sales came in below even the lowest estimate (5.9 million) of analysts polled by Econoday. Their consensus was for a slight month-over-month uptick to a rate of 6.085 million units.
Single-family home sales dropped to a seasonally-adjusted annual rate of 5.13 million, a 3.2 percent monthly decline, but were up 28.9 percent from a year earlier. Existing condominium and co-op sales did rise, up 1.4 percent to a 720,000 unit rate.
"Home sales were down again in April from the prior month, as housing supply continues to fall short of demand," said Lawrence Yun, NAR's chief economist. "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.
"Despite the decline, housing demand is still strong compared to one year ago, evidenced by home sales from this January to April, which are up 20 percent compared to 2020," Yun continued. "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 in April was $341,600, up 19.1 percent from the April 2020 median of $286,800. This is a record high and marks 110 straight months of year-over-year gains. The median existing single-family home price was $347,400, an annual gain of 20.3 percent while condo prices were up 12.6 percent to a median price of $300,400.
Inventory, while still near historic lows, did rise by 10.5 percent during the month to 1.16 million units. This is estimated at a 2.4 month supply at the current rate of sales. The March supply was 2.1 months and a year earlier, when there were 1.46 million homes available for sale, the supply was 4.0 months.
Properties typically remained on the market for 17 days in April, down from 18 days in March and from 27 days in April 2020. Eighty-eight percent of the homes sold in April 2021 were on the market for less than a month.
First-time buyers were responsible for 31 percent of sales in April, compared to 36 percent in April 2020. Yun commented, "First-time buyers in particular are having trouble securing that first home for a multitude of reasons, including not enough affordable properties, competition with cash buyers and properties leaving the market at such a rapid pace."
Individual investors or second-home buyers, who account for many cash sales, purchased 17 percent of homes in April, up from 15 percent in March and 10 percent in April 2020. All-cash sales accounted for 25 percent of transactions in April 10 points more than in April 2020. Distressed sales - foreclosures and short sales - accounted for less than 1 percent of the month's sales.
"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."
Of the four major regions, only the Midwest experienced higher sales than during the prior month. Those sales, at an annual rate of 1.29 million, were up 0.8 percent from March and 13.2 percent year-over-year. The median price in the Midwest was $259,300, a 13.5 percent annual gain.
Existing-home sales in the Northeast fell 3.9 percent for the month, but the annual rate of 730,000 units is a 30.4 percent leap from a year ago. The median price was $381,100, a 22.0 percent rate of appreciation.
Sales in the South decreased 3.7 percent, to a rate of 2,6 million, a 39.0 percent improvement from a year earlier. The median price jumped 15.8 percent to $289,600.
The West saw sales down 3.1 percent month-over-month at 1.230 million. Still, this was a 53.8 percent surge compared to April 2020. The median price in the West was $501,200, an annual increase of 19.9 percent.