It's beginning to look like the demand for existing homes has found an equilibrium. They sold at an annualized, seasonally adjusted rate of 5.05 million in April, according to the National Association of Realtors. That's nearly the same as their rate of 5.09 million in March. Unfortunately, this isn't not nearly enough to soak up all of the homes being dumped on the market by distressed homeowners. Inventory increased and prices fell. What's holding sales back?
First, here's the chart for existing home sales:
You can see that over the past three months, sales have hovered around the 5 million mark. It's hard to make any meaningful assertions about the year before that, as the market was in a transition due to the expiration of the home buyer credit last spring. Its hangover may finally have worn off, so the market may be stabilizing at this level.
Unfortunately, that's not enough sales to keep prices from falling, as inventory has been rising for three months straight:
You can see that it jumped in April, by 9.9%. The 3.87 million homes available mark the highest number since September 2010. It also translates to 9.2 months of supply.
Prices have also declined over the past year. The median price in April was $163,700, down 5.0% from April 2010. These numbers are not seasonally adjusted, so it may not be that meaningful to compare it March. Prices declined the most in the northeast, which is also where sales were off by the most in April.