Existing-home sales drop 17.8 percent in April
Existing-home sales reported a large dip due to the coronavirus pandemic, dropping 17.8 percent from March to a seasonally adjusted annual rate of 4.33 million in April—down 17.2 percent from last year.
“The economic lockdowns—occurring from mid-March through April in most states—have temporarily disrupted home sales,” explains Lawrence Yun, NAR’s chief economist. “But the listings that are on the market are still attracting buyers and boosting home prices.”
For context, April’s drop in existing-home sales brings the lowest level of sales and the largest month-over-month drop since July 2010, when a 22.5 percent drop was reported with a total of 3.45 million in sales.
A call for construction to combat rising home prices
April’s median existing-home price increased 7.4 percent from last year—marking the 98th straight month of year-over-year gains.
“Record-low mortgage rates are likely to remain in place for the rest of the year, and will be the key factor driving housing demand as state economies steadily reopen,” says Yun. “Still, more listings and increased home construction will be needed to tame price growth.”
At the end of April, total housing inventory was down 1.3 percent at 1.47 million units—down 19.7 percent from last year.
A positive outlook for the industry’s future
“While virtually every sector of the American economy has been hit hard by this pandemic, our nation’s 1.4 million Realtors® have continued to show an undying commitment to their profession, their clients and America’s real estate industry,” says NAR President Vince Malta.
Malta continues on, expressing his hope for the housing industry’s ability to boost the country’s economy. “As we find during any time of crisis, we have a tremendous opportunity to evolve and emerge stronger and more efficient,” he explains. “Having renewed our focus on new, innovative ways to serve American consumers, I am confident the real estate sector and our nations Realtors® are uniquely positioned to lead America’s economic recovery.”
According to Realtor.com®’s Market Hotness Index, the areas sparking the most buyer interest include the following:
- Colorado Springs, Colo.
- Fort Wayne, Ind.
- Topeka, Kan.
- Pueblo, Colo.
- Columbus, Ohio
Single-family home sales were down 15.5 percent from last year, while existing condominium and co-op sales were down 31.6 percent from last year. “There appears to be a shift in preference for single-family homes over condominium dwellings,” says Yun. “This trend could be long-lasting as remote work and larger housing needs will become widely prevalent even after we emerge from this pandemic.”
Down across the board
All four major regions saw a decline in both month-over-month and year-over-year sales.
April’s existing-home sales:
- Northeast: down 16.9% to an annual rate of 540,000—down 18.2% from last year
- Midwest: down 12.0% to an annual rate of 1.10 million—down 8.3% from last year
- South: dropped 17.9% to an annual rate of 1.88 million—down 16.8% from last year
- West: down 25.0% to an annual rate of 810,000—down 27.0% from last year