U.S. Existing-Home Sales Enter 14th Straight Month Of Declines
Decline suggests continued weakness in housing market despite strong economy. U.S. Existing-Home Sales Enter 14th Straight Month Of Declines (#GotBitcoin?)
The U.S. housing market continued to soften in April, with the spring selling season so far proving a disappointment despite falling mortgage rates and a strong economy.
Existing-home sales fell 0.4% in April from the previous month to a seasonally adjusted annual rate of 5.19 million, the National Association of Realtors said Tuesday. Compared with a year earlier, sales in April declined 4.4%, the 14th straight month of annual declines.
The housing market is “underperforming in relation to economic performance, with job creation and [lower] mortgage rates,” said Lawrence Yun, the trade group’s chief economist.
The housing market has struggled for more than a year as rising prices, higher mortgage rates and a shortage of inventory have led would-be home buyers to tap on the brakes.
Those factors seemed to be shifting in favor of buyers this spring, raising hopes for a sales rebound. Average mortgage rates have fallen nearly a percentage point since November, the number of homes for sale has grown and home-price growth has moderated.
So far, that hasn’t been enough to buoy sales. “The big headwinds that are keeping things down are still there,” said Cheryl Young, a senior economist at Trulia.
The report for April continued to show that the market is shifting in favor of buyers. The median sale price for an existing home in April was $267,300, up 3.6% from a year earlier. Home price appreciation has slowed significantly from a year ago, when price growth was running over 5%.
There was a 4.2-month supply of homes on the market at the end of April, based on the current sales pace, up from 4 months last April and the highest level this year, according to the Realtors.
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“Buyers have more time to make decisions on properties now. Last spring things were going really quick,” said Ashley Lauren Farnschlader, a real-estate agent in Philadelphia.
But the signs of a slowdown could be scaring off some buyers fearful of acquiring a house they may have difficulty selling in the event of another market downtown, reminiscent of the crash a decade ago.
“There are real risks there for the younger generation to get a little bit gun-shy at the first sign of things moderating,” said Ralph McLaughlin, deputy chief economist at CoreLogic Inc.
Nonetheless, economists cautioned against reading too much into the lackluster data for April. Pending home sales, which typically predict closed sales the following month, were up nearly 4% in March to an eight-month high. Economists said that closings may have been delayed by a backlog in mortgage applications.
“It’s possible for a month or so the process just got clogged, that lenders just weren’t expecting a surge of mortgage applications,” said David Berson, chief economist at Nationwide Insurance.
Purchases of previously owned homes account for most of U.S. homebuying, although the new-home market recently has been showing some signs of a rebound. Home-building in the U.S. increased 5.7% in April from the prior month, driven by an uptick in single-family construction across much of the country. A gauge of home-builder confidence, meanwhile, rose to the highest level since last fall.
“Our forecast is that any lull we’re seeing in the market now is temporary,” Mr. McLaughlin said.
U.S. Existing-Home Sales Declined 2.2% in September
Sales fell to a seasonally adjusted annual rate of 5.38 million.
Sales of previously owned U.S. homes declined in September, a sign that high prices and slim inventory continue to weigh on the housing sector despite low interest rates, strong employment and firmer wage growth.
Existing-home sales fell 2.2% in September from the previous month to a seasonally adjusted annual rate of 5.38 million, the National Association of Realtors said Tuesday. Economists surveyed by The Wall Street Journal expected sales declined 0.7% last month.
“The housing market is in an unbalanced situation” with soaring prices and persistent low inventory, said Lawrence Yun, the trade group’s chief economist.
Compared with a year earlier, sales in September rose 3.9%. Purchases of previously owned homes account for the bulk of U.S. home-buying. August’s sales were revised up slightly to a 5.50 million pace from an earlier estimate of a 5.49 annual pace.
The housing market’s weakness has come despite many favorable conditions for potential buyers. Mortgage rates have been dropping steadily in recent months. The average interest rate on a 30-year fixed-rate mortgage at the end of September was 3.64%, down from about 4% six months earlier, according to Freddie Mac.
Still, a shortage of homes for sale in some areas means home prices remain high. The median sale price for an existing home in September was $272,100, up 5.9% from a year earlier. That marked 91 straight months of year-over-year price gains and the strongest pace of appreciation since January 2018. There was a 4.1 month-supply of homes on the market at the end of September, based on the current sales pace.
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