Wednesday, May 23, 2012

Home Sales Increase

By Tony at MSN Real Estate

In April, homebuying season begins in earnest for most regions, and last month was no exception: Existing-home sales increased 3.4% in April from March, hitting a seasonally adjusted annual rate of 4.62 million, the National Association of Realtors said. That was 10% higher than in April 2011.

Meanwhile, the median sale price for existing homes increased 3.1% in April from March to $177,400; that was a 10.1% jump from April 2011. Coupled with March's price increase, this marks the first two-month period of back-to-back year-to-year price increases since mid-2010, the NAR says. Earlier this month, the NAR reported that 74 of the 146 largest U.S. metropolitan areas showed a price increase from the first quarter of 2011 to the first quarter of this year.

The most encouraging news, however, could come in the breakdown of who's paying for these homes.

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First-time buyers accounted for 35% of purchases in April, up from 33% in March and near April 2011's level. All-cash sales decreased to 29% of transactions, from 32% in March. Investors accounted for 20% of sales, nearly the same as in March and in April 2011.
On one hand, in a healthy market, first-time buyers represent 40% to 45% of the market, BMO Capital Markets economist Jennifer Lee told The Associated Press — and typically, a stable month includes 6 million home sales. But Lawrence Yun, the NAR's chief economist, cheered April's news as evidence that real buyers — or folks buying homes to live in them, rather than to rent or flip them — are coming back to the market. That is good for many reasons.

"A return of normal homebuying for occupancy is helping home sales across all price points, and now the recovery appears to be extending to home prices," he said in a press release. "The general downtrend in both listed and shadow inventory has shifted from a buyers market to one that is much more balanced, but in some areas it has become a sellers market."
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