April Existing Homes: 82% of total were 1st time buyers and distressed properties

Washington, D.C., May 24, 2010
WASHINGTON (May 24, 2010) – Existing-home sales rose again in April with buyers motivated by the tax credit, improving consumer confidence and favorable affordability conditions, according to the National Association of Realtors®.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 7.6 percent to a seasonally adjusted annual rate of 5.77 million units in April from an upwardly revised 5.36 million in March, and are 22.8 percent higher than the 4.70 million-unit pace in April 2009. Monthly sales rose 7.0 percent in March.

Lawrence Yun, NAR chief economist, said the gain was widely anticipated. “The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market,” he said. “For people who were on the sidelines, there’s been a return of buyer confidence with stabilizing home prices, an improving economy and mortgage interest rates that remain historically low.”

Total housing inventory at the end of April rose 11.5 percent to 4.04 million existing homes available for sale, which represents an 8.4-month supply at the current sales pace, up from an 8.1-month supply in March. Raw unsold inventory is 2.7 percent above a year ago, but remains 11.6 percent below the record of 4.58 million in July 2008.

A parallel NAR practitioner survey shows first-time buyers purchased 49 percent of homes in April, up from 44 percent in March. Investors accounted for 15 percent of transactions in April, down from 19 percent in March; the remaining sales were to repeat buyers. All-cash sales stood at 26 percent in April; they were 27 percent in March.
Link to NAR Press Release


Distressed sales accounted for 33% of all sales in April. The combined distressed sales and first time buyers accounted for 82% of all April sales.

The government's tax credit program ended 4/30/10 so "look out below" when the June, July and August existing home sales figures are released. Sit back and enjoy the show as grandpa is expecting CNBC and the White House to fabricate a positive spin on how 82% of existing homes sales represented by first time buyers and distressed sales is a positive sign that our economy is booming and a bottom has been reached in the housing market.

The only bottoms witnessed in 2010 are the "bottom of the barrel" politicians in D.C. and the BP black hole at the "bottom" of the Gulf.