Existing-home sales tumble as supply crunch squeezes hard

The numbers: Existing-home sales ran at a seasonally adjusted annual 5.46 million pace in April, the National Association of Realtors said Thursday.

What happened: Sales of previously-owned homes fell 2.5% from March to April and were 1.4% lower than a year ago. It was the second-straight month to chart a yearly decline.

Economists surveyed by MarketWatch had forecast a 5.50 million pace.

The big picture: Exceptionally low levels of supply have the housing market reeling. Homes stayed on the market for an average of only 26 days in April.

The median price for homes sold in April was $275,200, which was 2.8% higher than a year ago. That’s a sharp deceleration from annual price changes over the past few years, and bears watching.

The sales picture was mixed regionally, as always. Sales in the Northeast were down 4.4%, while they were unchanged in April. In the South, sales dipped 2.9%, and in the West, they were down 3.3%.

First-time buyers made up 33% of all purchases in April, NAR said. That’s still well below their long-time share of about 40%, and it’s lower than the 34% share they held a year ago. During the rocky early years of the housing recovery, analysts wanted to see those levels return to normal. First-timers represented fresh demand in a skittish market.

But now, that dynamic has flipped. Genworth Mortgage Insurance Chief Economist Tian Liu has noted that because first-timers are by definition not selling a home when they buy, their increased participation has been one of the biggest culprits in pressuring inventory so dramatically.

NAR now forecasts existing-home sales will finish 2018 at a pace of around 5.6 million, up only 1.8% over 2017’s sales.