Dive Brief:
- Existing home sales inched up 1.7% between March and April to a seasonally adjusted annual rate of 5.45 million, the National Association of Realtors reported Friday.
- Sales rose in the Northeast and Midwest regions, while sales slipped in the South and West. The share of first-time buyers grew to 32%, up from 30% in March.
- The median existing-home price in April was $232,500 — 6.3% above the same time last year. April marked the 50th consecutive month of year-over-year gains in existing-home prices.
Dive Insight:
Existing home sales were slightly higher in April than predicted, as economists surveyed by Bloomberg forecast a 1.3% gain. April was the second consecutive month of increases in existing home sales.
NAR Chief Economist Lawrence Yun said the housing market is "slowly building momentum" due largely to low mortgage rates and a slight rise in housing inventory. "Except for in the West — where supply shortages and stark price growth are hampering buyers the most — sales are meaningfully higher than a year ago in much of the country," he said in a release.
The bump in first-time buyer share is great news for residential builders trying to draw in millennials, who have been frustratingly slow to make the switch from renting to owning. However, builders have reported difficulty adding new starter-home inventory due to increasing regulations.
"Looking ahead, with demand holding steady and supply levels still far from sufficient, the market for entry-level and mid-priced homes will likely continue to be the most competitive heading into the summer months," Yun added.
Housing reports this month have been mostly optimistic for the residential industry. Builder confidence held steady at a score of 58, and housing starts rose 6.6% in April to a 1.172 million annualized rate. Today's report will be followed by new home sales data on May 24 and pending home sales on May 26.
