April existing home sales lagged expectations slightly after the March 10-year high, and the tight supply of houses is still generating "frenzied" buying activity in many areas, bidding prices up, the National Association of Realtors reported Wednesday.
The month's sales dipped 2.3% to a seasonally adjusted annual rate of 5.57 million when a 5.65 million rate was expected. The March sales rate, at a revised 5.70 million, was the most since the run-up to the financial crisis in 2007. The NAR sees 5.64 million total sales in 2017, a projection that is likely to be upgraded soon.
Below the surface of a relatively strong housing market is increased competition, with Realtors reporting many of their open house showings mobbed by people who bid the price up considerably.
"A lot of markets are already reporting frenzied activity with multiple offers pushing up prices," NAR Managing Director of Housing Research Danielle Hale told reporters, answering a question from Market News International.
The April total of existing houses for sale was 1.9 million units, down 9.0% from a year earlier despite the usual March-to-April increase. Though not as bad as through August, when supply was down 9.3% in a year, the decline was cutting into potential sales that would be possible with such strong demand.
The mild April decline could have been at least partly a result of April's lower mortgage rates, "so there was not as much penalty for waiting," Hale said. Otherwise it was not surprising to see a little pullback after such a strong March.
Tuesday's government report on new single family home sales pointed to the root of the supply problem, with April's sales off 11.4% to a 569,000 annual rate. The main driver of existing home sales is new-home sales, which turns the previous house into a sales listing.
"More like 700,000 to 800,000 (sales) would be nice to see" in a balanced market, Hale said, and demand "could support even more than that."
Another earlier government report, on new-house completions in April, showed an annual rate of 1.1 million, when 1.5 million or higher is needed to bring supply closer to demand. The NAR said there was only 4.2 months of supply when 6 months would be more normal. A year earlier the supply was at 4.6 months.
The average time between listing and sale during the month was only 29 days nationally, 10 days fewer than a year earlier, and as little as 23 days in some markets in the West, like San Jose and Santa Clara. Fifty-two percent of all homes sold in April were off the market in less than a month, a new high.
The morning's Mortgage Bankers Association report on mortgage applications showed those for purchases rather than refinancings were only 3% higher than a year earlier.
The national median price in April was $244,800, up 6.0% in a year while, Hale pointed out, the April jobs report showed wages up much less, 2.6% over 12 months.
In certain counties, particularly on the West Coast, the median price is more than twice as high, equaling or exceeding previous records during the pre-crisis housing bubble years and exceptionally high even adjusted for inflation. For all Western states the median price was $358,600, 6.8% higher than the same month last year.
April sales were down in three of the four geographic regions, with the Midwest the only increase, up 3.8%.
