Existing homes stayed on the market for less time in April than in any month since 2011, but tight inventory drove a decline in existing home sales over March’s record pace, a new report from the National Association of Realtors shows.
Total existing-home sales, which NAR categorizes as completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 2.3% to a seasonally adjusted annual rate of 5.57 million in April from a downwardly revised 5.7 million in March.
March’s pre-revision seasonally adjusted rate of 5.71 million made March the best month for existing home sales since February.
The newest report from NAR, covering April’s sales, shows that despite the decline in April, sales are still 1.6% above a year ago and at the fourth highest pace over the past year.
According to Lawrence Yun, NAR’s chief economist, demand from buyers is still far exceeding the available supply, leading to both the decline in existing home sales and the fact that homes are flying off the market.
NAR’s report shows that homes typically stayed on the market in April for a new record low of 29 days, down from 34 days in March and 39 days in April 2016.
April marks the first time since NAR began tracking time on market in 2011 that the time on market has been less than 30 days.
The previous shortest time on market before April’s 29 days was May 2016, when homes stayed on the market for an average of 32 days.
NAR’s report also showed that 52% of homes sold in April were on the market for less than a month, which is a new high.
According to NAR’s report, there were several markets that are far hotter than the national average, including San Jose-Sunnyvale-Santa Clara, Calif., where homes sold in an average of 23 days; San Francisco-Oakland-Hayward, Calif., where homes sold in an average of 25 days; Denver-Aurora-Lakewood, Colo., where homes sold in an average of 27 days; and Seattle-Tacoma-Bellevue, Wash., where homes sold in an average of 28 days.
“Last month's dip in closings was somewhat expected given that there was such a strong sales increase in March at 4.2%, and new and existing inventory is not keeping up with the fast pace homes are coming off the market,” Yun said. “Demand is easily outstripping supply in most of the country and it's stymieing many prospective buyers from finding a home to purchase.”
According to Yun, every major region besides the Midwest saw a decline in existing sales in the month of April.
NAR’s report also showed that the median existing-home price for all housing types in April was $244,800, up 6% percent from April 2016 ($230,900).
April's price increase marks the 62nd straight month of year-over-year gains, NAR’s report showed.
Additionally, NAR’s report showed that total housing inventory at the end of April climbed 7.2% to 1.93 million existing homes available for sale, but that figure is still 9% lower than one year ago (2.12 million).
Total housing inventory has also fallen year-over-year for 23 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.6 months a year ago, NAR’s report showed.
“Realtors continue to voice the frustration their clients are experiencing because of the insufficient number of homes for sale,” Yun said. “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.”