Existing US Home Sales Rebound from 20-month Low: NAR
The sale of previously-owned US homes rebounded sharply in April in the latest sign the housing recovery was gathering pace after a volatile first quarter.
Existing US home sales rose 1.3 percent to an annual rate of 4.65 million, rebounding from a 20-month low of 4.59 million, the National Association of Homebuilders reported today. The increase was below forecasts, which called for a gain of 2.2 percent to 4.68 million.
April marked only the second increase in sales in nine months. Sales were subdued in the first quarter, declining 5.1 percent in January, 0.4 percent in February and 0.2 percent in March, as severe weather weighed on an already struggling sector.
Sales are 15 percent lower than the July peak of 5.38 million units. Compared to April 2013, sales were down 6.8 percent.
Existing home sales offer the latest hope the housing sector was recovering after a weak first quarter. Last week the Commerce Department said building permits – a forward looking indicator of residential construction intentions – advanced 8 percent to 1.08 million in April, the highest level since June 2008. Housing starts increased 13.2 percent to 1.072 million, the highest level since November 2013, as all four US regions reported increases.
The minutes of the April 29-30 Federal Open Market Committee policy meetings revealed policymakers were concerned about the housing recovery. Officials noted a range of factors impacting the recovery in this area of the economy, including affordability challenges and construction bottlenecks. The April data offered more reason for optimism. The inventory of unsold homes available increased 6.5 percent year-on-year, and the median home price increased at the slowest rate since March 2012.
Economists view the spring as a critical season for the housing sector. However, the key challenge for the sector remains affordability, as noted by the Federal Reserve. Rising home costs and higher mortgage rates continue to dampen activity, as consumers continue to face weak income growth and an uncertain jobs market. Homebuilders say buyer traffic remains subdued in May, although expectations of future sales are higher.
Sales expectations were not enough to boost homebuilder confidence this month, according to the National Association of Home Builders. The Housing Market Index showed builder confidence declined in May.
The Commerce Department will complete the picture of April’s housing recovery Friday with the release of new home sales data. New home sales declined 14.5 percent in March to the lowest level in eight months, official data showed.
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