Spring Finally Arrives for US Housing Market
Spring has finally arrived for the US housing market, it would seem, according to a report issued Thursday by the National Association of Realtors. The report brought a sigh of relief to many economists, who had started to fear that the sluggish housing sector might soon begin to weigh on the broader economy. According to the report, sales of previously owned homes rose 1.3 percent from March to a seasonally adjusted annual rate of 4.65 million units. Of course, sales are still down 7 percent compared to last April, and needs to pick up to match the average pace from last spring and summer. Between May and October 2013, the existing homes were selling at an annualized pace of over 5 million.
Last month’s sales were essentially unchanged from April 2013 in terms of multifamily homes such as condominiums and townhomes, but sales of single-family residences were down almost 8 percent. The NAR is currently predicting full year sales to decline this year from 2013’s total of 5.1 million, even if sales continue to improve through the rest of the year. That’s because the spring season, typically the housing sector’s busiest time of year, has been slow to get going this year because of extreme weather that relentlessly pounded the East Coast in March. With the slow start, an NAR spokesman noted, homes would have to sell at an annual pace of nearly 6 million through the rest of the year before we would reach last year’s numbers.
Based on last month’s rate of sales, the US housing market is currently holding a 5.9 month supply of inventory, up 17 percent from March and just below the 6 month supply level considered a healthy balance of buyers and sellers. Prices have gained momentum in recent months as well, with April’s median sales price coming in at $201,700. That’s a 5.2 percent increase over the median sales price in April 2013, and the first quarter median was up 8.6 percent as compared with the first three months of 2013. Thursday’s report was particularly encouraging for the West and South regions, as both saw sales growth between March and April. Sales were unchanged in the Northeast, meanwhile, and down just a bit in the Midwest.
A report on new home sales is expected Friday from the US Commerce Department.