Home sales fell in April amid supply squeeze

WASHINGTON/May 24, 2017 (AP) (StlRealEstate.News) — Americans pulled back their pace of home-buying in April, as shrinking inventories and rising prices are putting them in a bind with fewer and fewer options.

The National Association of Realtors said Wednesday that sales of existing homes slipped 2.3 percent last month to a seasonally adjusted annual rate of 5.57 million. Still, a stable job market has supported solid demand from buyers as home purchases are 1.6 percent higher than a year ago.

But the specter of ever tightening supplies is starting to squeeze the market. Would-be buyers are mobbing open houses as sales are occurring on the shortest timeline ever recorded by the Realtors. The inventory of homes for sale has declined on an annual basis for the past 23 months, creating a shortage that has pushed up prices above income growth.

The number of properties listed for sale has plunged 9 percent over the past 12 months to 1.93 million. Homes are staying on the market for a median of just 29 days. The fast-moving market has fueled rising home values that have priced some entry-level buyers out of the market.

The median sales price has risen 6 percent from a year ago to $244,800. But the sales volume of homes worth less than $250,000 has declined over the past year, while homes worth more than the median have experienced sales growth.

Sales declined last month in the Northeast, South and West, while rising in the Midwest.

As a result of the rising prices, it’s still cheaper to buy rather than rent, but the gap is narrowing.

The real estate firm Trulia released an analysis Wednesday finding that buying was more affordable in the 100 largest metro areas, provided the owner provided a 20 percent down payment and stays at least seven years. But rental prices were flat or falling in 93 of the metro areas, while home prices kept rising — such that it might soon be cheaper to rent than buy in high-priced markets such as Honolulu and the California Bay Area cities of San Francisco, San Jose and Oakland.

Relatively low mortgage rates still favor buying in many markets.

Mortgage buyer Freddie Mac said the average rate on 30-year fixed-rate home loans edged down to 4.02 percent last week from 4.05 percent the prior week. The rate was 3.58 percent a year ago and averaged 3.65 percent in 2016, the lowest level in records dating to 1971.

JOSH BOAK, AP Economics Writer

Kathy Bratkowski
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Kathy Bratkowski is an award-winning writer and multimedia producer. Her television work has been recognized with eleven regional Emmy® awards and multiple Telly awards. Her documentaries and programs have screened at film festivals (St. Louis International Film Festival and New York Television Festival). She writes and produces videos and web content for dozens of national corporations. In a previous life, she was a television news producer and worked in the corporate world. She is a published feature and short story writer and has an M.A. in Marketing and an M.F.A. in Creative Writing. She teaches Multimedia Storytelling (aka Convergence Media Production) at St. Louis Community College-Forest Park.