Both new and existing home sales posted increases in April. Although the gains were minimal, it remains a positive sign that home sales continue to see sustained demand. The rise in sales activity suggests that the housing market may finally be stabilizing.



New home sales increased a slight 0.3% in April to a seasonally adjusted 352,000 homes from a downwardly revised March figure of 351,000. Sales for the previous three months were revised lower by 3,000 units. In April, new home inventories declined to 296,000 from a March figure of 308,000 on a non-seasonally adjusted basis. Non-seasonally adjusted units of unsold inventory have not recorded a monthly increase since May 2007 and are now at their lowest levels since May 2001 as builders continue to scale back building activity. There are now 10.1 months of supply on a seasonally-adjusted basis based on the current sales pace which is the lowest it has been since February 2008. In April, median new home prices increased to $209,700 from a revised March figure of $202,200. Median new home prices in March were the lowest they had been since December 2003 before the increase in April. Median new home prices increased 3.7% from last month but are down 14.9% from the same year-ago period.



Annualized sales of total existing homes in April increased 2.9% from March levels to 4.680 million units. Sales of existing homes are still down 3.5% from the 4.850 million units in April 2008. Median existing home prices in April increased slightly to $170,200 from $169,900 in March. This is the third straight month that existing home prices have increased and the highest they have been since December. Existing home inventory increased for the third straight month in April as sellers put their homes onto the market for the busy spring home-buying season. Inventory of existing homes increased 8.8 percent to a preliminary 3,968,000 units from 3,648,000 units in March. At the current sales pace, there are 10.2 months of supply of existing homes on the market. National average mortgage rates increased from the previous week to 4.91% in the latest Primary Mortgage Market Survey released weekly by Freddie Mac on May 28th. Rates are now back up to their highest levels since the middle of March. Average fixed-rate mortgages have remained under 5.0% for the past 11 weeks. In the week ending May 22nd, the MBA’s seasonally-adjusted Purchase Index increased slightly to 256.6 from 254.0 in the previous week. The latest figure reflects a 1.02% increase from last week but a 27.25% drop from the same period last year.



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