April Existing Home Sales Down 1.0% to 4.89M Rate

Existing home sales decreased 1.0% in April to a seasonally adjusted 4.89 million-unit rate, the National Association of Realtors announced Friday.

The sales decrease to 4.89 million compared to the 4.850 million-unit pace predicted by IFR Markets’ poll of economists. It followed a revised 1.8% drop to a 4.94 million-unit level in March, originally reported as a 2.0% decline to a 4.93 million-unit level.

On a year-over-year basis, though, sales overall were down 17.5% from a 5.93 million-unit sales pace.

An ease in mortgage restrictions could help the market going forward. “In the past week, Freddie Mac and Fannie Mae announced that they were eliminating their 'declining market’ policies, effective June 1,” said NAR president Richard F. Gaylord. “This means consumers across the country will have access to safe, affordable financing with downpayments of only 5% on most mortgages, with 100% financing available on some loan products, and we could see an upturn in home sales this summer.”

“I would encourage buyers who were disappointed by poor mortgage options to take another look at the market because the lending changes are significant,” said NAR senior economist Lawrence Yun. “Also, a recent notable drop in interest rates on conforming jumbo loans will help consumers in high-cost markets like California and New York.”

Sales fell in two of the four regions of the country in April, decreasing 6.0% in the Midwest and 4.4% in the Northeast, while rising 6.4% in the West. Sales in the South were flat in the month.

Inventory levels rose 10.5% at the end of April to 4.552 million existing homes for sale, representing an 11.2-month supply at the current sales pace, up from 4.118 million or 10 months last month.

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