As this week’s signal that homebuyers are returning to the market, both Existing Home Sales and New Homes Sales posted improvement versus month-prior figures this April.
According to the National Association of REALTORS, the number of Existing Home Sales rose by 130,000 units in April.
New Home Sales rose by a modest 1,000 units in April.
As a twist in the story, however, although sales activity is rising, the available housing inventory is rising faster.
Versus March 2009, there were 300,000 more homes for sale in April — an increase of 9 percent. In addition, the “housing supply” rose to 10.2 months, its highest level since October.
This is good news for home buyers, of course, because home prices are a product of Supply and Demand. Depending on local conditions, buyers may find themselves in a position to demand lower sale prices or additional seller concessions.
The housing market has not fully rebounded but it continues to show signs of strength. With a few more months like March and April, it’s reasonable to assume that homebuyers will lose some of their leverage for contract negotiation.
When that happens, expect home prices to rise.