The recent run of dour April housing figures continued this week, with the National Association of Realtors (NAR) announcing that existing-home sales plunged 17.8% during the month.
The plummet — the largest monthly drop seen since the homebuyer tax credit expired in July 2010 — brought the seasonally adjusted annualized sales pace to 4.33 million, the lowest rate since September 2011 saw a pace of 3.45 million units.
The year-over-year decrease was likewise staggering, with existing-home sales 17.2% below the 5.23 million reported for April 2019. Each of the four major regions tracked by the NAR posted both monthly and yearly sales declines, with the West logging the steepest fall in both.
“The economic lockdowns – occurring from mid-March through April in most states – have temporarily disrupted home sales,” said Lawrence Yun, NAR’s chief economist. “But the listings that are on the market are still attracting buyers and boosting home prices.”
Not that there are as many to choose from as a normal spring buyer’s market, with the coronavirus pandemic leading many sellers to pull their listings from an already constrained supply. The inventory of homes for sale ebbed even further to 1.47 million units, the fewest on record for an April. That’s down 1.3% from March and a staggering 19.7% year over year.
Unsold inventory at the end of April is at a 4.1-month supply at the current sales pace, up from 3.4 months from March, but down from 4.2 months in April one year ago.
Even with buyers delaying their purchase decisions as both the outbreak and measures to contain it persist, Joel Kan, associate vice president of economic and industry forecasting at the Mortgage Bankers Association noted that the drop in inventory drove the median sales price up more than 7% annually. The increase, which brought the median existing-home price for all housing types to $286,800, marks 98 straight months of year-over-year price growth.
Despite the bleak data, both Kan and Yun were positive about the trajectory of the market.
“With many states around the country now gradually reopening, the five-week rebound in purchase applications reported in MBA’s Weekly Applications Survey may be an indicator that April is the low point for home sales,” Kan said. “Activity may start to stabilize and move upward over the next few months.”
“Record-low mortgage rates are likely to remain in place for the rest of the year, and will be the key factor driving housing demand as state economies steadily reopen,” said Yun. “Still, more listings and increased home construction will be needed to tame price growth.”