Steel Markets

Sales of Existing Homes Dip for Third Month as Inventory Shrinks

May 21, 2021

A shortage of inventory resulted in a third straight month of decline for existing-home sales. Sales in April fell 2.7% to a seasonally adjusted annual rate of 5.85 million, reported the National Association of Realtors.

“Home sales were down again in April from the prior month, as housing supply continues to fall short of demand,” said Lawrence Yun, NAR’s chief economist. “We’ll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes. The falling number of homeowners in mortgage forbearance will also bring about more inventory.”

The monthly declines belie a still-hot housing market that saw existing-home sales jump 33.9% from a year ago. Sales from January through April were 20% higher than the same period in 2020.

Housing inventory was at 1.16 million units at the end of April, representing a 2.4-month supply. Median price for an existing home was at a record high of $341,600, a 19.1% increase from April 2020.

Low inventory and soaring sales prices have made it a seller’s market. Reports of multiple offers and all-cash purchases, well above asking price, dominate housing news. Realtors report properties are getting multiple offers as soon as they are listed. NAR said 88% of homes sold in April were on the market for less than a month and typically are available for just 17 days, down from 18 days in March and 27 days in April 2020.

Housing Type and Regional Stats

Single-family home sales were at a SAAR of 5.13 million, a slip of 3.2% from March and up 28.9% from April 2020. The median price for an existing single-family home jumped 20.3% year-over-year to $347,400.

Condo and co-op sales rose 1.4% from March to April to a SAAR of 720,000 units and soared 84.6% from a year ago. Median condo price increased 12.6% year-over-year to $300,400.

Sales on a year-over-year basis rose by double digits in all four regions. From March to April, only the Midwest saw an increase in sales and that was marginal at 0.8%. Sales dipped 3.9% in the Northeast, 3.7% in the South and 3.1% in the West.