The real estate market in the U.S. continues to feel the ill-effects of the coronavirus pandemic as the existing-homes sales dropped in April and month-over-month decline become the largest drop in almost ten years.
For the second month in a row, the existing-home sales suffered a decline, further dropping in April by 17.8 percent from its March level, according to the latest National Association of Realtors report.
The year-on-year sales decreased by 17.2 percent to 4.33 million (seasonally adjusted annual rate) from 5.23 million in April 2019. The month-over-month decline, on the other hand, is the largest since July 2010 at 22.5 percent.
The declines were due to the disruptions brought about by the lockdowns, but homes that are on the market still managed to attract buyers, Lawrence Yun, NAR's chief economist said.
Home prices still strong
Meanwhile, the existing-home price median price posted strong growth in each region. The median price was up by 7.4 percent from a year before - rising from $267,000 to $286,800 - for all housing types, thanks to the increase in prices recorded in West, Midwest, South, and Northeast regions.
With record-low mortgage rates likely to stay put for the rest of 2020, the rise in price is seen to continue, which has already recorded 98 straight months of year-on-year growth.
First-time buyers make up 36 percent of the April sales, up from March 2020, which stood at 34 percent. Individual investors or second-home buyers, on the other hand, account for 10 percent of homes sold in April, which has declined from 13 percent that was recorded in March 2020.
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Breakdown per region
All four major regions also saw declines in sales month-over-month and year-over-year; the West region suffered the biggest loss, both month-over-month and year-over-year.
In the Northeast region, existing-home sales dropped 16.9 percent in April 2020 for an annual rate of 540,000, a decrease of 18.2 percent from the same period last year. The median house price is up by 8.7 percent from a year ago to $312,500.
The Midwest region recorded a drop in existing-homes sales of 12 percent for an annual rate of 1.10 million, sliding 8.3 percent compared to the previous year. The median house price rose to $229,200 or a 9.3 percent increase from one year ago.
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The South region also fell by 17.9 percent; the annual rate is 1.88 million in April, dropping 16.8 percent from one year ago. As with other regions, the median house price in the South also rose; the median house price was $249,400, increasing 6.4 percent compared to the same period last year.
Lastly, the West region saw its existing-home sales figures falling by 25 percent with an annual rate of 810,000 in April. The existing-home sales in April 2020 were 27 percent lower compared from one year ago. The median price, meanwhile, was up 6.1 percent compared to the same period last year, to $419,300.
Existing-home sales include single-family, coops, townhomes, and condominiums, and are based on MLS transaction closings. The annual rate for the month is the projected total number of actual sales for one year if the month's relative pace remains constant for 12 consecutive months.
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