Sales of existing homes rose in April and remain higher than a year ago, while home prices continued to climb during the month, according to a report released Tuesday by the National Association of Realtors.
The uptick in sales and the higher home prices are the latest in a series of signals that the nation’s housing market might be inching toward recovery. But perhaps more encouraging than the numbers was the fact that the improvements “were broad based across all regions,” the report stated.
“It is no longer just the investors who are taking advantage of high affordability conditions. A return of normal home buying for occupancy is helping home sales across all price points, and now the recovery appears to be extending to home prices,” Lawrence Yun, the NAR’s chief economist, said in a statement. “The general downtrend in both listed and shadow inventory has shifted from a buyers’ market to one that is much more balanced, but in some areas it has become a seller’s market.”
Total sales of existing homes increased 3.4 percent in April, to a seasonally adjusted annual rate of 4.6 million — 10 percent higher than a year ago. The total inventory of existing homes in the country rose in April to 2.5 million, a seasonal increase that represents about a six-month supply at the current sales rate. But the inventory of listed homes remains far lower than a year ago, when there was a nine-month supply.
“A diminishing share of foreclosed property sales is helping home values. Moreover, an acute shortage of inventory in certain markets is leading to multiple biddings and escalating price conditions,” Yun said, citing the Washington area among others. “We expect stronger price increases in most of these areas.”
The median existing-home sales price rose in April to $177,400, marking the first time that sales prices have risen in consecutive months since the summer of 2010. Yun said he expects home prices to increase modestly this year, with “stronger improvement” coming in 2013.
Tuesday’s numbers offered the latest sliver of encouraging news for the nation’s battered housing market, which has been weighing down the broader economy for half a decade.
The recent good news has come in part because of modest improvements in the nation’s job market, which means fewer people are falling behind on their mortgages and would-be homeowners are becoming more confident about buying.
Mortgage rates remain historically low. Housing inventories have shrunk in some areas, as real estate agents report increasing demand. Some lenders have shown a willingness to loosen upon the strict credit standards put into place after the financial crisis.
Meanwhile, permits for new housing have surged. The number of new homes under construction rose last month, and confidence among builders has remained high.
In addition, some of the nation’s largest banks have begun to undertake more short sales rather than merely foreclosing on struggling homeowners, an approach that experts say will cut down on vacant homes and help to heal the market.
The housing market’s overall picture, however, remains mixed at best, with few signs that a full recovery will happen anytime soon. Although home prices have begun to rebound in some markets, in others sales have been sluggish and prices continue to lag.
Roughly 11 million homeowners remain underwater, meaning they owe more than their houses are worth. Millions of foreclosures are still in the pipeline across the country, threatening to push home prices down further — or at least keep them from rising significantly — until the backlog gets cleared.
That backlog isn’t going to vanish anytime soon. RealtyTrac reported recently that U.S. foreclosure activity dropped 5 percent from the previous month and was down 14 percent from April 2011.
But for every bright spot such as California and Arizona, which saw declines in foreclosure activity, there were places such as Florida and New Jersey, where the numbers have continued to climb.
Locally, Washington has continued to fare better than much of the country.
Jackie Von Schlegel, who oversees a team that sells homes in the District, Maryland and Virginia, has spent nearly 25 years in the local market but said she has seldom seen it as vibrant as it has been in recent months.
“We are so busy,” Von Schlegel said. “In the last two months, we have seen a significant change in the number of sales. As soon as somebody puts something on the market it’s gone, if they price it right.”
She attributes part of the recent uptick to historically low interest rates, as well as to seasonal patterns that bring more buyers out in the spring and summer. But she also senses a more fundamental optimism among buyers and sellers that the worst of the housing slump is over.
“You can just see it and feel it,” she said. “I think we’re going to have a fantastic year.”