Existing Home Sales Rise Slightly More than Expected

Existing Home Sales measures the change of existing residential buildings that were sold during the previous month. This report helps to gauge the strength of the U.S. housing market and is a strong indicator of overall economic strength. The Survey states that 4.62 million existing residential buildings were sold in April, however, this is higher than the 4.61 million expected by analysts. This is essentially bullish for the U.S. housing market. From the report, existing-home sales rose in April and remain above a year ago, while home prices continued to rise, according to the National Association of Realtors. Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 3.4 percent to a seasonally adjusted annual rate of 4.62 million in April from a downwardly revised 4.47 million in March, and are 10.0 percent higher than the 4.20 million-unit level in April 2011. Lawrence Yun, NAR chief economist, said the housing recovery is underway. “It is no longer just the investors who are taking advantage of high affordability conditions. A return of normal home buying for occupancy is helping home sales across all price points, and now the recovery appears to be extending to home prices,” he said. “The general downtrend in both listed and shadow inventory has shifted from a buyers' market to one that is much more balanced, but in some areas it has become a seller's market.” An increase in existing homes sold implies a healthy housing market, and because of the multiplier effect, housing has an impact on the rest of the economy. Increases in homes sold suggest increased household income and in turn an economic expansion, and visa versa. The National Association of Realtors is the national association representing the real estate finance industry which compiles this information.