Economist on home sales: ‘Activity remains tepid’
Sterne Agee chief economist Lindsey Piegza had some words regarding Thursday’s existing-home sales report, and they weren’t particularly inspired.
Even though April saw the first increase in sales this year so far, the majority of that progress was riding on the volatile multi-family home market, Piegza explained. Multi-family units were up 7.3%, while single-family homes were only up 0.5%.
On a year-over-year level especially, sales were down 6.8%, and that number falls to 7.7% for single-family homes.
"Housing activity remains tepid with the vast majority of sales in the multi-family unit space," she said in a release Thursday. "After back-to-back months of declining sales at the start of the year, warmer spring weather hasn’t been enough to create noticeable momentum in housing purchases," sentiment echoed yesterday by NY Federal Reserve president William Dudley. "Industry insiders remain cautiously optimistic as we head into the key spring selling season, but with prices on the rise, many potential home-buyers are reportedly being priced out of the market."
Piegza added that lending standards may need to loosen if home values continue their upward trajectory.
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Existing-home sales up for the first time this year
The National Association of Realtors had slightly more positive news to report this month. Existing-home sales increased for the first time this year in April, bumping up 1.3% to a seasonally adjusted annual rate of 4.65 million.
Single-family sales were up 0.5% to a rate of 4.06 million, but are still 7.7% below last year’s pace.
“Some growth was inevitable after sub-par housing activity in the first quarter, but improved inventory is expanding choices and sales should generally trend upward from this point,” said NAR chief economist Lawrence Yun. “Annual home sales, however, due to a sluggish first quarter, will likely be lower than last year.”
April’s estimate, for one, is still 6.8% below April 2013’s 4.99 million-unit pace.
However, total housing inventory ticked up 16.8% to a 5.9-month supply, a significant difference from March’s 5.1-month supply.
The median existing-home price was $201,700, a 5.2% improvement year-over-year. For single-family homes, that price was $201,100, up 4.7% since last year.
“We’ll continue to see a balancing act between housing inventory and price growth, which remains stronger than normal simply because there have not been enough sellers in many areas. More inventory and increased new-home construction will help to foster healthy market conditions,” Yun added.
NAR president Steve Brown pointed out that the average time on market also shrunk in April; with more inventory comes better (and faster) choices for buyers.
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