Sales of existing homes increased in April for the first time this year and only the second time since July as falling mortgage rates and the spring weather lured buyers.
Closings rose 1.3 percent to 4.65 million annually, slightly higher than March's 4.59 million rate reported the National Association of Realtors today. Economists had forecast 4.69 million units. Sales remain 15 percent below the post-recession peak of 5.38 million units of last July. They are down 6.8 percent on the year.
In April the nationwide average rate for a 30-year mortgage fell from 4.53 percent to 4.26 percent according to bankrate.com.
The median selling price rose 5.2 percent to $201,700 from $196,700 in March for the highest nationwide average since last August. Inventory for sale jumped 6.5 percent to 2.29 million units from 1.96 million. That is the largest number of homes on the market since July 2012. The boost in offerings brought the supply up to 5.9 months at the current sales pace from 5.1 in March and the longest clearing time since August 2012. A six month supply is considered normal.
Some analysts point to the gain in availability, low mortgage rates and an improving job market as signs that sales will continue to rise as the traditional spring and summer selling season gets underway.
Others note the drop in mortgage rates is tied to the yield decline in the 10-year Treasury which fell 16 basis points in April from a high of 2.81 percent to close at 2.65 percent. Falling yields are not normally associated with a strengthening economy.
While non-farm payrolls have seen the best three months to April since the first quarter of 2012, the large number of long term unemployedand very poor labor force participation and household formation rates militate against a trend back to historical number of purchased homes.
Sales were flat in the Northeast, lower in the Midwest and higher in the South and West.
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