The Real Deal Los Angeles

Existing U.S. home sales are up for second month in a row

Growth points to a strong job market, but prices continue to climb
May 20, 2016 10:30AM

Model homes in Sacramento, California

Model homes in Sacramento, California

Home sweet home, America.

Fueled by flourishing job growth and persistently low interest rates, home sales across the country rose for the second month in a row in April.

From March to April, the number of sales of existing homes grew by 1.7 percent, exceeding the anticipated increase of 1.3 percent, the Wall Street Journal reported. By the end of the year, economists anticipate the overall pace to reach 3 percent.

Sales were exceptionally strong in the Midwest, which saw a 12.1 percent increase from the prior month.

Sales rose to seasonally adjusted annual rate of about 5.5 million, according to the National Association of Realtors. All the while, inventory was down compared to the period last year. More than 2 million homes were available for sale by late April — up 9.2 percent from March — but down 3.6 percent compared to April 2015.

However, supply may be on its way. Single-family home construction was up more than 3 percent in April.

Meanwhile, home prices remain on an upward trajectory. In April, median sale price for a previously owned home was $232,500 — 6.3 percent more expensive than last year, and marking the 50th straight month of year-over-year gains.

The low supply is what led to rising home prices, Lawrence Yun, NAR’s chief economist, told the Journal, and the “tight inventory conditions still persist.” [WSJ]Cathaleen Chen