Low inventory led to decreasing existing home sales and days on market in April, according to the National Association of Realtors. The median days on market also declined, reaching a new low of 29 days.
Total existing home sales, which includes townhouses, condominiums, co-ops and single-family homes, fell 2.3 percent from March, from a downwardly revised 5.70 million in March to a seasonally adjusted annual rate of 5.57 million in April. However, sales are still up 1.6 percent compared to last April and sales are at the fourth highest pace over the past year.
“Last month’s dip in closings was somewhat expected given that there was such a strong sales increase in March at 4.2 percent, and new and existing inventory is not keeping up with the fast pace homes are coming off the market,” said Lawrence Yun, NAR chief economist. “Demand is easily outstripping supply in most of the country and it’s stymieing many prospective buyers from finding a home to purchase.”
Inventory grows, but can’t keep up with demand
Total housing inventory grew 7.2 percent to 1.93 million existing homes for sale, but it is 9.0 percent lower than inventory levels last April at 2.12 million. It is also the 23rd consecutive month of falling year-over-year inventory. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.6 months in April 2016. Six months of inventory is considered a balanced market for both buyers and sellers.
The median days on market in April was 29 days, which is the shortest timeframe since NAR began tracking in May 2011. The previous record was 32 days in May 2011. According to NAR, 52 percent of homes sold in April were on the market for less than a month, which is another record.
“Realtors continue to voice the frustration their clients are experiencing because of the insufficient number of homes for sale,” said Yun. “Homes in the lower- and mid-market price range are hard to find in most markets, and when one is listed for sale, interest is immediate and multiple offers are nudging the eventual sales prices higher.”
The median existing home price rose 6.0 percent from last year, from $230,900 in April 2016 to $244,800 in April 2017. This also is the 62nd straight month of year-over-year gains.