US existing home sales fall in April, reversing prior gains

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Washington (AFP)

Sales of US existing homes fell in April, reversing gains seen in prior months amid rising prices and interest rates, according to an industry survey released Thursday.

But even with the sales decline, the supply of homes available was still far too tight to meet demand even though inventories ticked slightly higher for the month, the National Association of Realtors said in its monthly report.

Sales of single-family houses, townhouses, condos and co-ops fell 2.5 percent compared to March, to an annual rate of 5.46 million, undershooting a consensus forecast, the report said.

This put sales 1.4 percent below the rate recorded a year ago, which has fallen year-on-year for two months in a row, NAR said.

The report followed government data released Wednesday showing sales of new homes also slowed in April and median prices had fallen in a cooling market, suggesting the housing sector could contribute less than expected to GDP growth in the second quarter of the year.

"The root cause of the underperforming sales activity in much of the country so far this year continues to be the utter lack of available listings on the market to meet the strong demand for buying a home," NAR Chief Economist Lawrence Yun said in a statement.

Median prices were up 5.3 percent from April 2017, rising to $257,900 -- the 74th consecutive month of rising prices.

Nevertheless, the number of homes on the market actually jumped 9.8 percent to 1.8 million. But that a level is still 6.3 percent below the level recorded a year ago, and this measure has fallen for 35 months in a row.

Analysts say that with rising input costs, a lack of buildable lots in many cities and an acute shortage of labor, construction has failed to keep pace with demand in the US housing markets.

This has driven up prices after years of steady job gains in the current economic recovery, eating into affordability -- a situation exacerbated by rising mortgage rates and recent limits to real estate deductions from federal income taxes.

A Freddie Mac survey released Wednesday showed 30-year fixed-rate mortgage commitment rates hit 4.6 percent, the highest level in 11 years.