Existing Home Sales Match Two-Decade Low in April; Inventory Swells
Sales of existing homes continued to fall at a record pace in April, dropping by 1 percent to a seasonally-adjusted annual rate of 4.89 million units, the National Association of Realtors said Friday morning. The April sales pace matches an all-time low first recorded in January, and is the eighth decline in existing home sales in the past nine months; the NAR's records go back to 1999. April's sales volume is 17.5 percent below the 5.93 million unit pace recorded one year earlier. Somewhat amusingly, the NAR blamed the drop on "restrictive lending practices," suggesting that if mortgage lenders were more willing to lend, the pace of sales in April wouldn't have been so slow. "Isn't the fact that lenders were willing to lend in the first place the reason we're in this mess?" asked one attorney that spoke with HW, and asked that her name not be used. You'd think. But NAR president Richard Gaylord said that recent decisions by Fannie Mae (FNM) and Freddie Mac (FRE) to loosen lending restrictions should help boost demand from buyers in the weeks ahead. "Consumers across the country will have access to safe, affordable financing with downpayments of only 5 percent on most mortgages," he said, "with 100 percent financing available on some loan products, and we could see an upturn in home sales this summer." Hope springs eternal for the realtor crowd, apparently, despite evidence that falling prices haven't been enough to entice buyers into the market. Median prices dropped 8 percent relative to one year ago, the NAR said, reaching $202,300 in April -- numbers that the realtor-led organization said were being "distorted" by slowdowns in high-cost areas. The record drop in sales volume, combined with the traditional spring selling season that saw sellers put homes on the market, led to swelling inventories nationwide; housing inventory rose a stunning 10.5 percent in just one month to 4.55 million existing homes available for sale, an 11.2-month supply at the current sales pace. Months of supply stood at 10.0 months in March. The April inventory number is near the highest on record, according to a review of available NAR statistics. Single-family home sales fell 0.5 percent during April, while condo sales fell more sharply, losing 5.2 percent of annualized sales volume; only the Western region of the U.S. saw existing home sales rise on a monthly comparison basis. Prices in the Western region have fallen the most dramatically of any other U.S. region, and were off 16.7 percent from the year-ago median last month, the NAR said. For more information, visit http://ww.realtor.org. Disclosure: The author held no positions in FNM or FRE when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.