Existing home sales, though up 1.6 percent from a year ago, stuttered in April 2017, dipping sequentially from 5.70 million in March 2017 on a seasonally adjusted annualized rate (SAAR) to 5.57 million according to the National Association of Realtors® (NAR).
The first graph shows the monthly median price and the total number of home sales in the prior 12 months commencing January 2014. Total housing sales (raw monthly data – not seasonally adjusted) for the 12-month period ending March 2017 was the most seen since August 2007. Total sales in the trailing 12 months for April 2017 was 5.483 million versus 5.504 million in March 2017, a miniscule 0.38 percent difference.
The next graph shows the monthly raw data (not seasonally adjusted) for each month commencing January 2015.
A lack of inventory drove the friction on sales, with the number of active listings down 9.0 percent from a year ago to 1.93 million homes. The number of months of inventory of listings for sale at 4.2 months is far below 6.0 months – a level typically assumed to be normal. As a result, with demand outstripping supply, median price rose 6.0 percent in April 2017 to $244,800. This now makes 62 consecutive months of a year-over-year gain in median home prices.
Monthly median prices starting January 2015 are shown in the following table. Median prices on a year-over-year comparison show the impact of good demand coupled with very limited inventory.
Other metrics included in the NAR release:
- The 4.2 month inventory of homes available for sale was down from 4.6 months a year ago
- Homes sold in April were on the market a median 29 days (52 percent were on the market less than one month) – the shortest period of time recorded since NAR started collecting this metric in May 2011
- Short sales were on the market a typical 88 days, foreclosures 46 days and non-distressed properties 28 days
- Distressed sales made up just 5 percent of all April transactions, down from 6 percent in the prior month and 7 percent a year ago. Short sales made up 2 percent and foreclosures 3 percent
- Foreclosures sold at an average 18 percent discount versus non-distressed properties, while short sales were discounted 12 percent
- While all-cash buyers were completed in one-out-of-every five transactions (21 percent), investors paid all-cash 57 percent of the time
- Investors were the buyers of 15 out of every 100 sales, up from 13 a year ago
- 1st time homebuyers made up 34 percent of the market in April 2017, up from 32 percent a year ago
Despite the slight decline in April 2017, existing home sales remain on-track for another great year, with prices likely to continue increasing at 5 percent or greater. Given the sub-4 percent 30-year fixed-rate conventional loan interest rates (the lowest yet seen in 2017), prospective buyers in the market today have an opportunity to lock-in a low payment for potentially the coming three decades.
And for sellers, what a great time to sell given the lack of inventory.
Ted