Strong demand for homes combined with tight inventory levels led to significant price gains in April, as the median sales price reached $219,400. This is up 4.1% from March and 8.9% above the same month last year. As long as inventory remains in the low 5 months range, we are likely to continue seeing price gains in the 7%-9% range.
Homes sold at a seasonally adjusted annual rate of 5.04 million homes in April based on the report released by NAR. This was 3.3% slower than March's sales pace but still 6.1% above April of last year. The pace of home sales may be hampered by tight inventory levels in some markets. If new home construction increases this summer and inventory eases, we could see sales begin to increase again.
There were roughly 1% fewer homes available in April compared to the same month last year. This translated to 5.3 months of supply. Inventory continued to grow compared to the previous month as we move into the peak season. There has recently been some positive signs for new home construction; however, construction continues to lag behind expectations for the year amid concerns about the overall economy in the first quarter.
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