May 24, 2017 – Existing home sales provide the number of purchases made for homes, condominiums, and co-ops that have already been built. Existing home sales give an indication of demand for housing. While home resales may not generate new construction jobs like those that housing starts do, they have a similar effect on consumer spending as people purchase items for their new home.
Existing home sales dropped 2.3% in April to an annualized rate of 5.570 million. This comes in below the expectation of an annualized rate of 5.650 million and March’s revised 5.700 million level. Single-family home and multi-family units (condos) fell, 2.4% and 1.6%, respectively. Both single-family and multi-family resales are up 1.6% over last year. The median home price rose to $244,800, up 6% from last year. Supply increased 1.930 million, increasing the months’ supply to 4.2 months. The average number of days on the market was 29 days, down from 34 days in March, the shortest it has been since 2011.
With inventory increasing 7.2% and mortgage rates not changing drastically, we expect home sales to pull up in the coming months. Demand is high and supply is not increasing fast enough, driving prices up. At 4.2 months, supply is still tight as anything below 5 months is considered tight supply. Home resales are volatile but should have an upward trend during springtime like previous years. Even with the dip in sales, April was above last year. April marked the fourth highest month in the past 12 months and should continue to trend up.