April marked the third consecutive month of decreasing existing-home sales, which dropped 2.7% from March to a seasonally adjusted annual rate of 5.85 million, according to the National Association of Realtors (NAR).
Sales were still up 33.9% year over year, though that figure is skewed because sales were held down last spring during the first months of the COVID-19 pandemic in the United States.
The month-to-month slips in sales continue to be driven in part by a precarious lack of inventory nationwide according to NAR chief economist Lawrence Yun.
“Home sales were down again in April from the prior month, as housing supply continues to fall short of demand,” Yun said. “We’ll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes. The falling number of homeowners in mortgage forbearance will also bring about more inventory.”
First-time buyers, in particular, are struggling to find their first homes for several reasons, Yun noted, including a shortage of affordable properties, competition with cash buyers and properties leaving the market quickly. Properties remained on the market for just 17 days in April, down from 18 days in March and 27 days in April 2020. Eighty-eight percent of homes sold in April were on the market for less than a month.
Many first-time buyers are also getting priced out, with the median existing-home price of all property types at $341,600, up 19.1% year over year. That jump represents a record high, marking 110 consecutive months of annual price growth. With buyers showing a preference for space over density, prices for single-family homes showed an even sharper rise, growing 20.3% to $347,400. Prices for condos and co-ops, meanwhile, rose more moderately at a 12.6% annual clip to reach $300,400.
Yun observed that, despite the inventory issues, housing demand remains robust compared to last year. Home sales from January to April, he pointed out, are up 20% compared to 2020.
“The additional supply projected for the market should cool down the torrid pace of price appreciation later in the year,” Yun added. Any supplementary inventory can’t come soon enough — total housing inventory at the end of April was at 1.16 million units, up 10.5% from March’s inventory but still nearing record low levels. At the current sales pace, unsold inventory sits at a 2.4-month supply.