KEY MARKET INDICATORS as of May 29, 2018
April Housing Report
Housing market condition remained tight in April, but sales activity slowed slightly compared to March. Year-to-date, existing home sales were down slightly from last year’s pace. But we continued to see a gradual expansion in homebuilding activities and new home sales. Both are up by high single-digits in percentage terms compared to a year ago. Nationally, home prices are up around 7 percent in the first quarter.
Existing home sales reported a seasonally adjusted annual rate of 5.46 million units in April. As the home-selling season got underway, inventory level increased seasonally – rising 9.8% to 1.8 million units. Despite this increase, housing supply remained very tight, with an implied supply at 4.0 months at current sales pace. Homes were sold quickly after listing. Typical homes stayed on the market for just 26 days in April, vs. 29 days a year ago. For realtors and loan officers, this means that while homebuyers may need more time finding the right home, once they have found the right one, they will act fast to close the sale. We also believe that the tight supply condition was one reason behind the increased number of all-cash transactions and purchase loans taken out by investors. The tight housing market condition also explains the rising home prices around the country, with home prices up by more than 7% in the first quarter, according to data from the Federal Housing Finance Agency.
New home sales reached a seasonally adjusted annual rate of 662,000 units in April. New home sales are up across all census regions, with the Midwest (up 14% y/y) and the West (up 15% y/y) regions showing the largest gains so far this year in percentage terms. The median sales price for new homes was largely unchanged from a year ago at $312,400 in April. This is $54,000 above the median price on existing homes.
Homebuilders reported housing starts at a seasonally adjusted annual rate of 1.29 million units in April. Multi-family housing starts were down by 50,000 units from March, while single-family housing starts were unchanged. The average pace of 893,000 units of single-family housing so far this year represents a gradual increase of around 40,000 units from last year’s pace. Most of the increase has come from the South region (up 8% y/y) and the West region (up 19% y/y).
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