May 22 (Bloomberg) -- Sales of existing U.S homes rose in April for the first time in three months, indicating the industry is stabilizing.
Purchases of previously owned houses, tabulated when a contract closes, increased 3.4 percent to a 4.62 million annual rate, figures from the National Association of Realtors showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a rise to a 4.61 million rate.
Gains in employment, depressed prices and record-low mortgage rates may bring more properties within reach of buyers, eliminating a source of weakness for the world’s largest economy just as risks from Europe’s debt crisis climb. At the same time, efforts to reduce foreclosures and free up financing are just beginning to take root, signaling a sustained housing recovery will take time to develop.
“Encouraging signs are emerging,” Michael Moran, chief economist at Daiwa Capital Markets America in New York, said before the report. “The sector is far from vigorous, but the headwind that has restrained the expansion seems to have largely ended.”
Stocks held earlier gains after the report. The Standard & Poor’s 500 Index rose 0.5 percent to 1,322.21 at 10:05 a.m. in New York. The S&P Supercomposite Homebuilder index climbed 1.7 percent.
Estimates in the Bloomberg survey of 73 economists ranged from 4.47 million to 4.8 million. The prior month’s pace was revised to 4.47 million, from a previously reported 4.48 million. April’s total was just shy of the 4.63 million reached in January that was the highest in more than a year.
Existing-home sales climbed to 4.26 million last year from 4.19 million in 2010. Demand peaked at 7.1 million in 2005 during the housing boom. In 2008, sales totaled 4.11 million, the least since 1995. Resales may rise to a 4.6 million to 4.7 million range this year and reach as much as 4.8 million in 2013, the Realtors group projected this month.
The median price of an existing home climbed 10 percent to $177,400 from $161,100 in April 2011, today’s report showed. It was the biggest year-to-year gain since January 2006 and reflected a seasonal mix in demand toward bigger houses and fewer distressed sales.
Families tend to buy in the spring, leading to an increase in sales of bigger properties, Lawrence Yun, NAR chief economist, said in a news conference today as the figures were released.
The number of previously owned homes on the market climbed 9.5 percent to 2.54 million. At the current sales pace, it would take 6.6 months to sell those houses compared with 6.2 months at the end of the prior month. April is usually the peak, or close to the peak, month for inventory for the year, Yun said.
Of all purchases, cash transactions, distressed properties and investors accounted for a smaller share last month, according to Yun.
Sales of existing single-family homes increased 3 percent to an annual rate of 4.09 million, while those of multifamily properties, including condominiums and townhouses, rose 6 percent to a 530,000 pace.
Purchases improved in all four regions.
A real estate agents group’s affordability index, which is based on a combination of resale prices, household income and mortgage rates, reached a record high in the first quarter, a report this month showed.