The sale of previously-owned US homes declined unexpectedly in April, but remained close to 18-month highs in the latest sign the housing market was recovering after a soft patch.
Existing home sales declined 3.3 percent to a seasonally adjusted 5.04 million in April, after surging 6.5 percent to a new 18-month high the previous month, the National Association of Realtors reported on Monday. A median estimate of economists called for an increase of 1 percent.
Sales increased in all regions except the Midwest, NAR data showed.
Total inventory at the end of April increased 10 percent to 2.21 million, which is still 0.9 percent below year-ago levels. At the current sales pace, it would take 5.3 months to clear existing inventories.
The median sale price of previously-owned homes increased for the thirty-eighth consecutive month in annualized terms. The average sales price in April was $219,400, which is 8.9 percent higher than year-ago levels.
“April’s setback is the result of lagging supply relative to demand and the upward pressure it’s putting on prices,” said NAR chief economist Lawrence Yun in a press release.
He added, “However, the overall data and feedback we’re hearing from Realtors® continues to point to elevated levels of buying interest compared to a year ago. With low interest rates and job growth, more buyers will be encouraged to enter the market unless prices accelerate even higher in relation to incomes.”
Low mortgage rates and a stronger labour market are expected to support the housing recovery in the year ahead. The average commitment rate on a 30-year fixed rate mortgage was 3.85 percent in the week ended May 14, up from 3.8 percent the previous week, according to Freddie Mac. Mortgage rates averaged 3.67 percent in all of April, well below year-ago levels of 4.34 percent.
The Commerce Department will report on new home sales next Tuesday. New home sales plunged 11.4 percent to a seasonally adjusted 481,000 in March, government data revealed last month.