RISMEDIA, May 29, 2009-Existing-home sales rose in April with strong buyer activity in lower price ranges, according to the National Association of Realtors®. Existing-home sales-including single-family, townhomes, condominiums and co-ops-increased 2.9% to a seasonally adjusted annual rate of 4.68 million units in April from a downwardly revised pace of 4.55 million units in March, but were 3.5% below the 4.85 million-unit level in April 2008. Lawrence Yun, NAR chief economist, said first-time buyers continue to influence the market but there also is a seasonal rise of repeat buyers. “Most of the sales are taking place in lower price ranges and activity is beginning to pick up in the midprice ranges, but high-end home sales remain sluggish,” he said. “The Federal Reserve needs to help restore liquidity for the jumbo mortgage market by buying these loans under the TALF program.”
“Because foreclosed properties will likely be released into the market over the rest of year, it is critical that distressed homes be quickly cleared from the market,” Yun said. “Fortunately, home buyers are being attracted to deeply discounted prices and are bidding up many foreclosed listings, particularly in California, Nevada, and Florida-this will set the stage for healthy market conditions going forward.”
An NAR practitioner survey in April showed first-time buyers declined to 40% of transactions, implying more repeat buyers are entering the traditional spring home-buying season. It also showed the number of buyers looking at homes has increased 14 percentage points from a year ago. “This is consistent with our forecast for home sales in the latter part of the year to be 10 to 20% higher than the second half of 2008,” Yun said.
The national median existing-home price for all housing types was $170,200 in April, which is 15.4% below 2008. Distressed properties, which accounted for 45% of all sales in April, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said conditions are optimal for buyers with good jobs and long-term plans. “We have record low mortgage interest rates, a wide selection of homes and affordable prices in most areas,” he said. “When you add the $8,000 first-time buyer tax credit, it’s hard to imagine a better time to make an investment in your future though homeownership.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.81% in April from 5.00% in March; the rate was 5.92% in April 2008; data collection began in 1971.
Total housing inventory at the end of April rose 8.8% to 3.97 million existing homes available for sale, which represents a 10.2.-month supply at the current sales pace, compared with a 9.6-month supply in March. “The gain in inventory is largely seasonal from sellers entering the spring market. Even with the rise, inventory over the past few months has remained consistently lower in comparison with a year earlier,” Yun noted.
Single-family home sales rose 2.5% to a seasonally adjusted annual rate of 4.18 million in April from a level of 4.08 million in March, but are 2.8% below the 4.30 million-unit pace in March 2008. The median existing single-family home price was $169,800 in April, which is 14.9% below a year ago.
Existing condominium and co-op sales increased 6.4% to a seasonally adjusted annual rate of 500,000 units in April from 470,000 in March, but are 9.4% lower than the 552,000-unit pace a year ago. The median existing condo price was $173,900 in April, down 18.5% from April 2008.
Regionally, existing-home sales in the Northeast jumped 11.6% to an annual pace of 770,000 in April, but are 10.5% below April 2008. The median price in the Northeast was $237,400, which is 9.6% lower than a year ago.
Existing-home sales in the Midwest slipped 2.0% in April to a level of 1.00 million and are 9.9% lower than a year ago. The median price in the Midwest was $138,800, down 11.7% from April 2008.
In the South, existing-home sales increased 1.8% to an annual pace of 1.74 million in April but are 8.9% lower than April 2008. The median price in the South was $148,000, which is 12.8% below a year ago.
Existing-home sales in the West rose 3.5% to an annual rate of 1.17 million in April and are 19.4% higher than a year ago. The median price in the West was $222,600, down 21.8% from April 2008.
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