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Rising Home Sales Limited by Credit, Inventory

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Home sales were better last month even as the distressed share of activity diminished. The news was good given that new construction and housing starts slumped.

In April, existing home sales came in at a seasonally adjusted annual rate of 4.97 million, the strongest pace since November 2009’s 5.44 million rate, the National Association of Realtors reported Wednesday. Sales reflect completed transactions for single-family homes, townhomes, condominiums and co-ops.

NAR said the rate moved up from an upwardly revised 4.94 million in March. Activity rose 9.7 percent from the same month in 2012 — the 22nd consecutive year-over-year increase.

“The robust housing market recovery is occurring in spite of tight access to credit and limited inventory,” NAR Chief Economist Lawrence Yun stated in the report. “Without these frictions, existing-home sales easily would be well above the 5-million unit pace.”

Distressed sales accounted for 18 percent of April sales versus 21 percent the prior month and 28 percent in the same month during the prior year. First-time homebuyers represented 29 percent of last month’s activity compared to 30 percent of March’s volume and 35 percent of the year-earlier period’s.

As of the end of last month, the total housing inventory was 2.16 million existing homes, an 11.9 percent increase over the previous month, the trade group reported. Compared to a year prior, the inventory has fallen 13.6 percent.

The latest inventory represents a 5.2-month supply, expanding from 4.7 months in March but short of the 6.6-month supply in April 2012.

The seasonally adjusted annual rate of privately owned housing completions was 689,000 in April, according to data jointly released by the Department of Housing and Urban Development and the Census Bureau. The rate tumbled from 804,000 in March but was better than the year earlier rate of 667,000.

The report indicated that privately owned housing starts sank 16.5 percent from March to a seasonally adjusted annual rate of 853,000. Housing starts, however, have improved 13.1 percent over the past year.

Building permits in April were a seasonally adjusted annual rate of 1,017,000, according to HUD and the Census Bureau. Permits were up 14.3 percent from a month earlier and 36 percent from a year earlier.

CoreLogic reported that total home sales amounted to an annual rate of 4,735,000 in March, a huge improvement from the 3,352,000 rate the prior month.

New home sales accounted for 333,000 of March’s rate, and existing sales represented 3,344,000.

CoreLogic said that distressed sales share was 21.8 percent of the latest activity, down from 23.0 percent a month earlier.

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