Dive Brief:
- Existing home sales in April unexpectedly fell 3.3% to an annual rate of 5.04 million units, the National Association of Realtors reported Thursday.
- Economists polled by Reuters had predicted a surge in existing home sales for the month, at an estimated 5.24 million-unit pace.
- The NAR attributed the decline to tight inventory and rising home prices. The Midwest was the only major region that saw increasing sales in April.
Dive Insight:
The dip followed a 6.1% jump in March existing home sales — their highest level in 18 months.
NAR chief economist Lawrence Yun said of the results: "April's setback is the result of lagging supply relative to demand and the upward pressure it's putting on prices... However, the overall data and feedback we're hearing from Realtors continues to point to elevated levels of buying interest compared to a year ago."
The disappointing news comes during a week of mixed market results. The NAHB announced Monday that builder confidence had fallen in May; the Commerce Department revealed a surprisingly steep uptick in April housing starts on Tuesday; and the Mortgage Bankers Association reported the second consecutive week of declining mortgage applications Wednesday.
Although this unexpected drop in existing home sales paints a bleaker picture for the housing market's future, the NAR predicts more buyers will soon enter the market — unless home prices continue to rise faster than wages.
