Sales of previously owned homes rose nationwide in April as the housing market picked up some steam amid the spring selling season.
Home resales climbed 1.3% from March to a seasonally adjusted annual rate of 4.65 million, the National Assn. of Realtors reported Thursday. That was the first gain this year, though it missed expectations slightly.
The uptick from March, driven by strong gains in the West, came as the housing market has cooled recently. Would-be buyers have struggled to afford houses after prices surged last year. And severe weather in much of the country further depressed sales to kick off 2014.
“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,” Lawrence Yun, the trade group’s chief economist, said in a statement.
But compared with April 2013, sales were down 6.8%. Yun said there would probably be fewer sales this year than in 2013, citing the poor first quarter.
In a sign that affordability remains a problem, the national gain from March came largely from condominium and co-op sales. Sales of those attached units climbed 7.3% from March. Single-family home sales, generally more expensive than multifamily units, rose just 0.5%.
Jay Feldman, an economist with Credit Suisse, said in a research note that “sales seem to be finding a bottom” but are held back by weak demand from first-time home buyers. Many of those would-be buyers are weighed down with student debt. As investors have pulled back this year, first-time buyers have struggled to fill that void, depressing sales as a result.
There could be help on the horizon. After shooting up last year, mortgage rates have stabilized and are still low historically. Lenders, on average, offered a 30-year fixed loan at 4.14% this week, the lowest rate since October, mortgage finance giant Freddie Mac said Thursday.
Inventory is also on the rise. There was a 5.9-month supply of existing homes for sale last month — meaning that if homes sold at their current pace, all properties on the market would be sold in that time period — compared with a 5.1-month supply in March.
Economists generally consider a six-month supply to be healthy.
More inventory should boost sales in the near future and temper the price increases that have locked some buyers out of the market, economists said.
The national median price rose 5.2% from April 2013 to $201,700. That was the slowest pace since March 2012.