The median sales price reached a new high of $286,800 in April, up 7.4% year over year.
Low inventory in the residential real estate market drove the median sales price of existing homes to an all-time high in April, according to the National Association of Realtors’ April Existing Home Sales report, released Thursday morning.
According to the monthly survey, the median sales price reached a new high of $286,800 in April, up 7.4% year over year. The highest existing-home price in the history of the report is largely attributable to a dearth of homes on the market, National Association of Realtors Chief Economist Lawrence Yun said on a call with reporters Thursday morning.
As the impact from the coronavirus slammed the market for residential real estate, the seasonally-adjusted annual rate of existing-home sales in April fell to 4.33 million—a 17.8% drop from March and 17.2% fall from the same time in 2019, according to the report.
The decline, the greatest month-over-month drop since July 2010, was dramatic, though not unexpected. Analysts polled by FactSet had predicted slightly worse, expecting a month-over-month decline of 18.4% and a year-over-year fall of 17.8%.
As sales slumped, the lack of inventory led to price gains, Yun told reporters. The trade group reported inventory totaling 1.47 million units at the end of April—down 1.3% from the month prior and 19.7% lower than the same time one year ago.
Taming the price growth will require more listings and new home construction, Yun said—both aspects of the housing market that have been stalled by the spread of the novel coronavirus and the restrictions put in place to slow its spread.
Yun said agents have recently reported encouraging signs that activity in the housing market is heating up, but also expressed caution about interpreting those signs until closing data is available. “What we are hearing from realtors is that they have been very busy as many governors opened up their economies,” he said. “Listings are popping up, they’re showing clients those homes.”
While activity appears to be livelier in May, Yun cautions that “we will not know the actual closing figures until about a couple of months from now.” While some figures, like purchase applications, have been trending up in recent weeks, “that does not mean economic impact,” Yun says. “Economic impact occurs at the closing table.”
By Shaina Mishkin written for Barrons
