The sale of existing homes increased 1.3 percent in April. This is the first increase so far in 2014. The National Association of Realtors reports that sales for were a seasonally adjusted 4.65 million. This is still about seven percent lower than sales in April of 2013. Home sales were more than 5 million for the six months from May 2013 to October 2013.
Sales should continue to remain solid with the help lower interest rates. The average rate for a 30-year, fixed-rate mortgage dropped from 4.2 percent to 4.14 percent last week, according to Freddie Mac.
Interest rates are remaining low due to a few contributing factors:
Low inventories of existing homes for sale have home buyers with few options
Banks remained stingy with new construction loans until recently.
The new mortgage regulations have left many would-be buyers out of market.
Loan applications for home purchases are running at a pace about ten percent behind last year's rate. There has been a modest increase in the number of refinance applications, but these too are significantly below last year's numbers. Many homeowners opt for a 15-year fixed mortgage when refinancing. That interest rate dropped from 3.29 percent to 3.25 percent.
Along with the slight increase in April home sales, the number of new home permits also increase beyond what most market watchers were expecting.
Joel Naroff with Naroff Economic Advisors points out that the April increase is for closed transactions. He adds that the delays in obtaining and closing loans could mean these numbers are from buying activity that occurred two months prior.
According to Naroff, "We need to wait until June before we have a really good idea about the condition of the existing home market."