April existing home sales rise by 2.9 percent
ALAN ZIBEL AP Real Estate Writer WASHINGTON
Sales of previously occupied homes rose modestly from March to April as buyers who were brave enough to dive into the market took advantage of prices that were 15.4 percent below yearago levels. The National Association of Realtors said today that home sales rose 2.9 percent to an annual rate of 4.68 million last month, from a downwardly revised pace of 4.55 million in March. The results slightly beat economists' forecasts. Sales had been expected to rise to an annual pace of 4.66 million units, according to Thomson Reuters. The median sales price plunged to $170,200, down from $201,300 in the same month last year. That was the second-largest price drop on record after January, when prices fell 17.5 percent. The number of unsold homes on the market at the end of April rose almost 9 percent from a month earlier to nearly 4 million. That's a 10-month supply at the current sales pace. "We still need a continuing and consistent rise in home sales to get the inventory down," said Lawrence Yun, the group's chief economist. Only then, economists say, will prices stabilize and eventually recover. Another big problem, Yun noted, is the lack of activity at the higher-end of the housing market, among properties priced at $750,000 or higher. Interest rates are much higher for loans above $730,000 that cannot be purchased by Fannie Mae or Freddie Mac. And that's sapping demand for expensive properties. "It's just stalled. Completely stalled," Yun said. The Realtors group is pushing for the Federal Reserve to start buying up those loans, even if they are not backed by Fannie and Freddie. It also wants the higher loan limits to apply to the whole country, not just expensive areas like California and New York.