The economic fallout from the coronavirus hit the housing market hard in April.
Sales of existing homes fell 17.8% month-to-month, and were 17.2% lower than April 2019, seasonally adjusted, according to the National Association of Realtors. That puts the annualized pace at 4.33 million units, the slowest sales pace since September 2011.
These numbers are based on closed sales, not signed contracts, so they represent contracts signed in late February and March. The April drop in closings is the largest one-month decline since July 2010, when the homebuyer tax credit, a federal stimulus resulting from the subprime mortgage crash, expired.
“Certainly with the lock-down occurring from mid-March, and given the shakiness from the stock market in February, that hurt pending contracts, so now we are seeing an almost 20% decline in existing homes sales,” said Lawrence Yun, chief economist for the Realtors. “April activity will be down, but what we are hearing from Realtors is they are getting busy as governors are opening the economy.”
The supply of homes for sale fell 19.7% annually to 1.47 million units for sale at the end of April. That is the lowest April inventory figure ever. Not only did potential sellers decide not to list their homes, as job losses mounted and the economy shut down, but some sellers already on the market pulled their listings.
That drop in inventory pushed prices to a new record high. The median price of an existing home sold in April rose 7.4% annually to $286,800. That record does not account for inflation, but is a nominal record-high.
Regionally, sales in the Northeast fell 16.9% monthly and 18.2% annually. In the Midwest, sales were down 12% monthly and down 8.3% from a year ago. In the South, sales dropped 17.9% monthly and 16.8% annually. In the West, where prices are highest, sales fell the most, down 25% monthly and down 27% from a year ago.
Mortgage rates did not help buyers, as they not only jumped, but were highly erratic in March, and lending tightened dramatically due to coronavirus mortgage forbearance programs that allow homeowners to delay payments. That made it even harder for those few buyers out in the market to get the financing they may have needed.
Sales of existing homes fell 17.8% month-to-month, and were 17.2% lower than April 2019, seasonally adjusted, according to the National Association of Realtors. That puts the annualized pace at 4.33 million units, the slowest sales pace since September 2011.
These numbers are based on closed sales, not signed contracts, so they represent contracts signed in late February and March. The April drop in closings is the largest one-month decline since July 2010, when the homebuyer tax credit, a federal stimulus resulting from the subprime mortgage crash, expired.
“Certainly with the lock-down occurring from mid-March, and given the shakiness from the stock market in February, that hurt pending contracts, so now we are seeing an almost 20% decline in existing homes sales,” said Lawrence Yun, chief economist for the Realtors. “April activity will be down, but what we are hearing from Realtors is they are getting busy as governors are opening the economy.”
The supply of homes for sale fell 19.7% annually to 1.47 million units for sale at the end of April. That is the lowest April inventory figure ever. Not only did potential sellers decide not to list their homes, as job losses mounted and the economy shut down, but some sellers already on the market pulled their listings.
That drop in inventory pushed prices to a new record high. The median price of an existing home sold in April rose 7.4% annually to $286,800. That record does not account for inflation, but is a nominal record-high.
Regionally, sales in the Northeast fell 16.9% monthly and 18.2% annually. In the Midwest, sales were down 12% monthly and down 8.3% from a year ago. In the South, sales dropped 17.9% monthly and 16.8% annually. In the West, where prices are highest, sales fell the most, down 25% monthly and down 27% from a year ago.
Mortgage rates did not help buyers, as they not only jumped, but were highly erratic in March, and lending tightened dramatically due to coronavirus mortgage forbearance programs that allow homeowners to delay payments. That made it even harder for those few buyers out in the market to get the financing they may have needed.
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