Home sales rise modestly as first-time homebuyers and bargain seekers buy homes. (Photo: iStockphoto)
Sales of existing single-family home sales rose 2.9 percent in April from April 2008, the National Association of Realtors reported yesterday. First-time buyers continue to make up a large proportion of homebuyers -- accounting for 40 percent of transactions in April, according to NAR. Those buying are looking for a bargain -- distressed properties (e.g., foreclosures and short sales), made up 45 percent of all sales.
Prices still trending downward
But because much of the activity in home sales continues to be in lower price ranges, the national median existing-home price -- $170,200 -- was low, down 15.4 percent below April 2008's median price. Says Lawrence Yun, NAR chief economist, "Most of the sales are taking place in lower price ranges and activity is beginning to pick up in the midprice ranges, but high-end home sales remain sluggish."
High inventory a problem
While the rise in home prices is good news, the large inventory of homes for sale shows that the housing market is still struggling. Total housing inventory was up 8.8 percent at the end of April, reaching a 10.2-month supply of homes for sale. (Meaning that it'd take more than 10 months to sell the current inventory of homes for sale; in a balanced housing market, the supply would be about six months of inventory.) With prices still down and inventory up, it looks like it will be quite some time before homesellers get a break.—Lauren Baier Kim