Previously owned U.S. home purchases increased in April as a bigger supply of properties lured buyers and raised prospects for a stronger spring buying season.
The 1.3 percent gain, the first this year, pushed sales to a 4.65 million annualized rate, National Association of Realtors data showed today. The number of available properties climbed to an almost two-year high, helping slow the pace of price appreciation.
A pickup in real-estate listings that improves affordability will help bring homeownership within reach of more Americans, increasing the odds the industry will recover from a yearlong slowdown. A gain in home construction last month showed builders are responding to limited inventory at the same time mortgage rates retreat and lure prospective buyers.
“The improvement in availability suggests stronger sales activity in the months ahead,” said Russell Price, senior economist at Ameriprise Financial Inc. in Detroit. Price is the second-best forecaster of existing home sales in the last two years, according to data compiled by Bloomberg. Still, “we need to see more building activity.”
“There’s not that many first-time buyers who are getting into the market,” said Stephanie Karol, a U.S. economist at IHS Global Insight in Lexington, Massachusetts. “We see a turnaround happening slowly.”
The report from the Realtors group showed the number of previously owned homes on the market rose 16.8 percent to 2.29 million, the highest since August 2012. At the current sales pace, it would take 5.9 months to sell those houses. Less than a five months’ supply is considered a tight market, the NAR has said.
The sales increase in April “is welcoming,” Lawrence Yun, NAR’s chief economist, told reporters as the figures were released. “I feel optimistic you would trend higher generally. Now with more inventory, I think there will be more buyers entering the market.”
Investors accounted for 18 percent of the home purchases last month, up from 17 percent a month earlier. Seven of 10 investors paid cash. All-cash transactions accounted for about 32 percent, about the same share as the last year, the report showed. First-time buyers represented 29 percent of all transactions.
Sales of single-family homes increased 0.5 percent to an annual rate of 4.06 million. Purchases of multifamily properties — including condominiums and townhouses — jumped 7.3 percent to a 590,000 pace.