Two new data reports offer a somewhat dreary view of current and potential home sales.
Sales of new single-family houses during April were at a seasonally adjusted annual rate of 569,000, according to estimates released by the
U.S. Census Bureau and the Department of Housing and Urban Development. This is 11.4 percent below the revised March rate of 642,000, but is 0.5 percent above the April 2016 estimate of 566,000. The median sales price of new houses sold in April was $309,200, while the average sales price was $368,300. The seasonally-adjusted estimate of new houses for sale at the end of April was 268,000, which represents a supply of 5.7 months at the current sales rate.
Potential existing-home sales during April fell to a 5.69 million seasonally adjusted, annualized rate (SAAR), a 0.2 percent drop over March’s revised data,
according to new data from First American Financial Corp. During April, the market potential for existing-home sales fell by 0.1 percent compared with a year ago, a decline of 5,000 (SAAR) sales.
First American also warned that the market for existing-home sales is underperforming its potential by 0.6 percent, or an estimated 32,000 (SAAR) sales. Although the housing market for existing-home sales was underperforming its potential by 200,000 (SAAR) sales, market underperformance has improved 84.1 percent compared to April 2016.
“Demand for existing-homes remains strong, as positive economic conditions and the demographic tail wind of Millennial demand continues to grow,” said Mark Fleming, chief economist at First American. “Meanwhile, sellers are increasingly unwilling to list their homes for sale. The market faces a ‘prisoner’s dilemma’: If everyone sells, there will be plenty of supply, but the risk of selling when others don’t, the inability to find a home to purchase at the right price, is preventing homeowners from putting their homes on the market. The ‘prisoner’s dilemma’ in housing is restricting supply, causing increased house price appreciation and falling affordability.”
