Sales of previously owned homes up 7.6% in April
Fueled by federal incentives for home shoppers, the U.S. housing market gained ground in April with sales of previously owned dwellings jumping 7.6% from March, the National Assn. of Realtors said Monday.
Buyers were motivated last month by cheap prices, low interest rates and federal tax incentives that expired April 30, the Washington real estate group said. Sales jumped in every region but the West, where they fell 6.2% as shoppers appeared to time purchases to take advantage of a tax credit in California.
To qualify for the federal credit of up to $8,000 for first-time buyers and up to $6,500 for certain current homeowners, contracts had to be signed by the end of April and those deals must close by June 30. The California tax credit of up to $10,000 for some purchases requires deals to close May 1 or after.
The national median home price — including single-family homes, town homes and condominiums — was $173,100 in April, up 1.4% from March and 4% from April 2009.
Economists are predicting sales will fall later this year after the tax-credit surge ends. The weak recovery in housing will probably continue if the job market improves, although the possibility of more foreclosures hitting the market remains a concern, economists said.
“In the grand scheme of things, housing is affordable again. Lenders aren’t really tightening standards anymore. And the employment situation has stabilized. That’s the good news,” said Michael D. Larson, a housing and interest rate analyst with Weiss Research.
“The bad? The backlog of distressed homes remains extremely high. Uncle Sam is just about the only guy making or backing home loans. And we’re certainly not seeing a rip-roaring rebound in the job market,” Larson said.
The National Assn. of Realtors’ data are based on its proprietary multiple-listing service and are reported as a monthly estimate that is adjusted for seasonal variations. Homes sold at a seasonally adjusted annual rate of 5.77 million units in April from an upwardly revised 5.36 million in March, the group said. Sales were up 22.8% from the 4.7-million-unit pace in April 2009.
Housing inventory jumped 11.5% at the end of April to 4.04 million previously owned homes available for sale, representing an 8.4-month supply at the current sales pace. That was an increase from an 8.1-month supply in March.
Regionally, resales of all types of homes surged 21.1% from March in the Northeast, 9.9% in the Midwest and 8.6% in the South. Sales fell 6.2% in the West but rose 5.2% from April 2009.
In California, April sales of single-family homes totaled 483,830, down 6.4% from March and off 8.1% from April 2009, according to the California Assn. of Realtors. The median price of a previously owned single-family detached home in the state was $306,230 in April, edging up 1.5% from March and jumping 21% from April 2009.
“It’s likely that the state tax credit that went into effect May 1 created an incentive for many buyers to postpone closing escrow so they could take advantage of both the state and federal tax credits that were available,” said Steve Goddard, president of the California real estate group. “We should see the pace of closed sales edge up in May and June as these tax-incentivized transactions close.”
A report last week by San Diego real estate research firm MDA DataQuick showed that sales of new and previously owned homes in California declined 1.3% in April from the same month last year. April sales in Southern California fell year-over-year for the first time in 22 months.
Analysts attributed that decline to fewer foreclosures on the market as well as some buyers possibly timing their purchases to take advantage of the California tax credit.
