Third Consecutive Month of Declining Existing Home Sales

Key Highlights

• According to the National Association of REALTORS®, existing home sales dropped -2.7% m/m in April
• Red hot demand continues to spike home prices

Sales of Existing Homes Continued to Fall in April

For the third consecutive month, existing home sales declined in April 2021.  The National Association of REALTORS® (NAR) reported that existing home sales fell -2.7% m/m.

Despite this April decline in existing home sales, demand continued to remain strong.  Sales from January through April in 2021 were up +20% compared to this same period during 2020 while the median home price of $341,600 was up +19.1%, according to NAR.

Steep Competition

The rate of sales hit record speed in April while sales prices were well above list price in nearly 50% of all offers.

Additionally, according to Zillow economist Mathew Speakman, “New listings volume got a decent bump in March and April, and more people believe it’s a good time to sell a home than at any time since the pandemic began.”

Fannie Mae Modified 2021 Prediction

Inventory played a key factor in Fannie Mae’s revised expectations for purchase and refinance volume during April. Fannie cut $43B from its 2021 purchase volume forecast for a total of $1.8T by the end of 2021.

Fannie also revised its refinance origination volume to $2.2T in 2021, an increase of $125B from its forecast in March.

NAR Expects Pace of Price Appreciation to Slow

Also related to inventory, NAR expects the pace of price appreciation to slow during the second half of 2021.  Again, inventory played a key factor in NAR’s projections.

“We’ll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home seller become more comfortable listing and showing their homes, said Lawrence Yun NAR’s chief economist.  Yun also expects, “The falling number of homeowners in mortgage forbearance will…bring about more inventory.’

Regional Sales Breakdown

Existing home sales in the Northeast dropped -3.9% in April from March’s sales.  However, the annual rate of sales in the northeast represents a +30.4% increase from one year ago in April.  The median price hit $381,100 in the Northeast, an increase of +22.0% y/y.

Midwest existing home sales rose +0.8% to an annual rate increase of +13.2% from April 2020.  The median home price in the Midwest was $259,300, an increase of +13.5% y/y.

Existing home sales in the South dropped -3.7% m/m in April 2021 with an increase of +39.0% y/y.  The median sale price in the South hit $289,600, an increase of +15.8% y/y.

The West’s existing home sales in April dropped    -3.1% m/m.  Still, existing home sales in the West surged +53.8% on a year-over-year basis.  The median sales price of an existing home in the West jumped +19.9% y/y to $501,200.

Thanks to the National Association of REALTORS®, Fannie Mae, Zillow and HousingWire.

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