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Existing-Home Sales, Prices Jump to Multiyear Highs

Existing-home sales rose 0.6 percent in April to an annual sales rate of 4.97 million, the highest level since November 2009, the ""National Association of Realtors"":http://www.realtor.org/news-releases/2013/05/april-existing-home-sales-up-but-constrained reported Wednesday. Economists had expected a 1.6 percent increase to 5.0 million from March's original report of 4.92 million sales. March sales were adjusted upward to 4.94 million.


The median price of an existing single-family home jumped $8,900 in the month to $192,800, the highest since August 2008.

The inventory of homes for sale rose to 2.16 million--its highest level since last September. The supply of homes for sale rose to 5.2 months, the highest since October. Inventory has been a persistent concern to NAR, which says the low supply of homes for sale has reduced the number of transactions.

Recently, though, inventory has edged up, consistent with the increase in the median price of an existing-home, which has risen in five of the last six months. The number and months supply of home for sale has gone up for three straight months.

The monthly NAR report--which tracks closings--increased despite a drop in NAR’s pending home sales index (PHSI) two months ago. The PHSI tracks contracts for sale.
The increase in closings was consistent, though, with the improvement in builder confidence reported last week by the National Association of Home Builders, which said its Housing Market Index increased in May for the first time this year. Homebuilders reported an increase in buyer traffic, meaning more people shopping for homes.

According to the NAR data, April home sales were up 9.7 percent over sales a year earlier, a slightly slower improvement than the 10.8 percent year-over-year gain reported for March. The median price too showed a modestly slower annual gain: 11.0 percent for April.

After falling to a cyclical low in August 2010, existing home sales had been improving steadily-helped by the federal homebuyer tax credit program until seeming to plateau since last November.


Monthly sales since November have averaged 4,943,000, up from 4,657,000 in the preceding six months and 4,467,000 from November 2011 through April 2012.

Although the sales pace fell short of forecasts, NAR Chief Economist Lawrence Yun described the housing results as ""robust"" and said the ""market recovery is occurring in spite of tight access to credit and limited inventory.""

Distressed homes--foreclosures and short sales--accounted for 18 percent of April sales, down from 21 percent in March and 28 percent in April 2012, NAR said. Eleven percent of April sales were foreclosures, and 7 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in April, while short sales were discounted 14 percent.

The smaller discounts for foreclosures and short sales in the last month suggests some market firming.

The median time on market for all homes was 46 days in April, down sharply from 62 days in March and 45 percent faster than the 83 days on market in April 2012, according to NAR. Forty-four percent of all homes sold in April were on the market for less than a month, while only 8 percent were on the market for a year or longer.

First-time buyers, the NAR said, accounted for 29 percent of purchases in April, compared with 30 percent in March and 35 percent in April 2012.

All-cash sales were at 32 percent of transactions in April, up from 30 percent in March; they were 29 percent in April 2012.

Regionally, existing-home sales in the Northeast rose 1.6 percent to an annual rate of 640,000 in April and are 4.9 percent above April 2012. The median price in the Northeast was $245,100, up 3.4 percent from March and 5.1 percent from a year ago.

Existing-home sales in the Midwest fell 3.4 percent in April to a pace of 1.12 million but are 9.8 percent above a year ago. The median price in the Midwest was $149,300, up 5.7 percent from March and 6.7 percent from April 2012.

In the South, existing-home sales rose 2.0 percent to an annual level of 2.01 million in April and are 14.9 percent above April 2012. The median price in the South was $168,700--the highest level since August 2008--4.1 percent higher than March and 10.6 percent above a year ago.

Existing-home sales in the West increased 1.7 percent to a pace of 1.20 million in April and are 4.3 percent above a year ago. The median price of an existing home in the West rose to $263,600 in April, up 2.6 percent from March and 17.5 percent from April 2012.

_Hear Mark Lieberman every Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:20 am EST._

About Author: Mark Lieberman

Mark Lieberman is the former Senior Economist at Fox Business Network. He is now Managing Director and Senior Economist at Economics Analytics Research. He can be heard each Friday on The Morning Briefing on POTUS on Sirius-XM Radio 124.

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