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Existing Home Sales Drop on Inventory Shortage

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The sale of pre-owned homes weakened last month and were down on a year-over-year basis for the second month in a row. Inventory shortages were blamed.

U.S. home buyers successfully closed on the purchase of 460,000 existing single-family homes, townhomes, condominiums and co-operatives during April.

Last month’s completed transactions brought total existing residential home sales during the first-four months of this year to 1.526 million units.

The National Association of Realtors reported the data Thursday.

Applying seasonal adjustments to the numbers, the annual rate of existing home sales came to 5.46 million, retreating from 5.60 million in March. The rate also fell from 5.54 million in May 2017.

It was the second month in a row with a year-over-year decline.

NAR Chief Economist Lawrence Yun explained in a written statement that the the slump was due to “staggeringly low inventory levels.”

“The root cause of the under-performing sales activity in much of the country so far this year continues to be the utter lack of available listings on the market to meet the strong demand for buying a home,” Yun stated. “Realtors say the healthy economy and job market are keeping buyers in the market for now even as they face rising mortgage rates.

“However, inventory shortages are even worse than in recent years, and home prices keep climbing above what many home shoppers are able to afford.”

On just single-family home sales, last month’s rate was 4.84 million.

Leading the overall retreat was the Northeast, where the seasonally adjusted annual rate fell more than 4 percent to 0.65 million.
A more than 3 percent drop in the West left the rate there at 1.19 million, while a nearly 3 percent decrease put the South’s rate at 2.33 million.

At 1.29 million, the Midwest’s rate was unchanged from March.

With a U.S. inventory of 1.80 million properties,
there was a 4.0-month supply of homes for sale. Average market time was just 26 days.

Last month’s median sales price was $257,900, while the average was $297,300.

One-third of sales were first-time buyers — the highest share since July 2017. All-cash share was 21 percent, and distressed sales made up 3.5 percent of sales — the thinnest share since NAR began tracking the metric in October 2008.

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