Fewer people purchased previously occupied homes in April. Activity among first-time homebuyers increased and foreclosure sales declined, but those factors weren’t enough to signal a recovery in the weak housing market, The Associated Press reports.
Sales of previously occupied homes fell 0.8 percent in April to a seasonally adjusted annual rate of 5.05 million units, the National Association of Realtors said Thursday. That’s far below the 6 million homes a year that economists say represents a healthy market.
Purchases made by first-time homebuyers increased to make up 36 percent of sales. That’s still below the 40 percent that the trade group says is consistent with better markets. Sales to investors dropped slightly to account for about 20 percent of the market.
Since the housing boom went bust, sales have fallen in four of the past five years and hit a 13-year low last year. Sharp price declines and low mortgage rates haven’t been enough to boost home sales this year.
Some people who want to buy can’t, mostly because banks have tightened lending requirements and are insisting on larger down payments. Many buyers who are able to qualify for loans are holding off, worried that home prices won’t hit bottom for some time. Economists say it could be years before the housing market fully recovers.
And more homes under contract for sale are being delayed, re-negotiated or canceled, mostly because of the tighter lending requirements. A separate survey from the trade group found 11 percent of Realtors said a contract was canceled because an appraisal came in below the negotiated price. And 14 percent said a contract was renegotiated to a lower price because of a low appraisal.
The median sales price in April rose 2.4 percent from March, to $163,700. It’s still down 5 percent from the same month one year ago. The median price of a new home is now nearly 31 percent higher than the median price for a previously occupied home. That’s twice the normal markup.
