After increasing for two straight months, sales of existing homes pulled back in April on both a monthly and annualized basis, the latest report from the National Association of Realtors (NAR) says.
That is not exactly a huge move, considering higher interest rates and othe factors. But one piece of data continues to rattle the housing market: Realtors also reported that the total housing inventory at the end of April stood 6.3 percent lower than a year ago (1.92 million) and has fallen year-over-year for 35 consecutive months.
The median existing-home price for all housing types in April was $257,900, up 5.3 percent from April 2017 ($245,000). March’s price increase marks the 74th straight month of year-over-year gains.
At the current selling rate of existing homes, which in April hit an annualized pace of 5.46 million, there are just 4 months of unsold inventory on the market. On average, homes were for sale for just 26 days in April. Moreover, 57 percent of homes sold remained listed for less than a month.
“The root cause of the under-performing sales activity in much of the country so far this year continues to be the utter lack of available listings on the market to meet the strong demand for buying a home,” says Lawrence Yun, NAR chief economist. “Realtors say the healthy economy and job market are keeping buyers in the market for now even as they face rising mortgage rates. However, inventory shortages are even worse than in recent years, and home prices keep climbing above what many home shoppers are able to afford.”
What is available for sale is going “under contract at a rapid pace,” Yun added. “Since NAR began tracking this data in May 2011, the median days a listing was on the market was at an all-time low in April, and the share of homes sold in less than a month was at an all-time high.”
Yun referred to this spring’s low inventory as “staggering.”
According to Freddie Mac, the average national rate for a 30-year, conventional, fixed-rate mortgage increased for the seventh straight month to 4.47 percent in April (highest since 4.49 percent in September 2013) from 4.44 percent in March.
First-time buyers accounted for 33 percent of sales in April (highest since last July), which is up from 30 percent last month — but down from 34 percent a year ago.
“Especially with mortgage rates going up in recent weeks, prospective buyers should visit with more than one lender to ensure they are getting the lowest rate possible,” says NAR President Elizabeth Mendenhall, a sixth-generation Realtor from Columbia, Missouri and CEO of RE/MAX Boone Realty. “Receiving a rate quote from multiple lenders could lead to considerable savings over the life of the loan. Ask a Realtor® for a few recommendations of lenders to contact to get a quote.”