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Home resales were up in April

By Holden Lewis · Bankrate.com
Monday, May 24, 2010
Posted: 10 am ET

Home resales were 22.8 percent higher in April than they were 12 months before, according to the National Association of Realtors.

Previously owned homes were resold in April at a seasonally adjusted annual rate of 5.77 million units, according to the National Association of Realtors. A year before, they were sold at a rate of 4.7 million.

But those are the seasonally adjusted numbers, and they might not be the best way to gauge sales because the homebuyer tax credit distorts things. In raw numbers, 521,000 homes were resold in April. That's a 26.2 percent increase over the previous April, and a 21.4 percent increase over March. It appears that there was a big surge in sales in March and April as buyers rushed to take advantage of the tax credit that ended April 30.

Lawrence Yun, the Realtors' chief economist, says: "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." Among those factors are "stabilizing home prices, an improving economy and mortgage interest rates that remain historically low."

There was an 8.4-month supply of homes for sale at the end of April, compared to a 10.1-month supply a year before. That number -- 8.4 months of supply -- will go up as home sales fall in May and June.

Because of distortions created by the homebuyer tax credits, it's going to take at least a year and a half before we have useful year-over-year sales comparisons.

According to the Realtors, half of homes resold in April cost $173,100 or less. That's a 4 percent increase over the median price in April 2009 of $166,500. Almost 71 percent of resales were for $250,000 or less.

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