By Lucia Mutikani
WASHINGTON, May 22 (Reuters) - U.S. home resales rose in
April to the highest level in nearly 3-1/2 years and prices
surged, offering the economy a buffer from the stiff headwinds
posed by belt-tightening by Washington.
The National Association of Realtors said on Wednesday
existing home sales advanced 0.6 percent to an annual rate of
4.97 million units, the highest level since November 2009.
The data underscored the housing market's improving fortunes
as it starts to regain its lost glory. Resales were 9.7 percent
higher than the same period last year.
'It's quite supportive of the overall economy,' said
Michelle Meyer, a senior economist at Bank of America Merrill
Lynch in New York. 'It's a cushion against some of the other
concerns in the economy.'
Economic activity appears to have slowed somewhat early in
the second quarter as the effects of higher taxes and deep
government spending cuts started filtering through.
Manufacturing, in particular, has been showing strains, but
housing has held up surprisingly well, with the gains in home
values helping to boost consumer confidence and retail sales.
The ripples from housing's recovery have also extended to
the jobs market, where construction employment has been rising.
That should limit the degree to which the economy slows this
quarter. It expanded at a 2.5 percent annual pace in the first
three months of the year.
U.S. stocks were narrowly mixed in afternoon trading.
Treasury debt prices were lower while the dollar was higher
against a basket of currencies.
Tight supplies in some parts of the country have constrained
the pace of home sales, but sellers are starting to wade back
into the market, attracted by rising prices.
In April, the median home sales price increased 11 percent
from a year ago to $192,800, the highest level since August
2008. It was the fifth consecutive month of double-digit gains.
With prices rising, more sellers put their properties on the
market. The inventory of homes on the market rose 11.9 percent
from March to 2.16 million.
That represented a 5.2 months' supply at April's sales pace,
up from 4.7 months in March. It remained, however, below the 6.0
months that is normally considered a good balance between supply
The market has been helped by monetary stimulus from the
Federal Reserve that has kept mortgage rates near record lows.
On Wednesday, Fed Chairman Ben Bernanke made clear he was not
yet ready to retreat from the U.S. central bank's monthly $85
billion asset purchase program.
Adding to signs that the housing recovery was becoming
firmly established, distressed properties - which can weigh on
prices because they typically sell at deep discounts - accounted
for only 18 percent of sales last month.
That was the lowest since the Realtors group started
monitoring them in October 2008. These properties, foreclosures
and short sales, had made up 21 percent of sales in March.
In another bright sign, properties are selling faster. The
median time on market for homes was 46 days in April, down from
62 days the prior month. That was the fewest days since the NAR
started monitoring that number in May 2011. Before the market
collapsed in 2006, it usually took about 90 days to sell a home.
'While there are clearly a lot of interested buyers out
there snapping up homes at a rapid clip, there do not seem to be
enough homes on the market,' said Omair Sharif, an economist at
RBS in Stamford, Connecticut.
About 44 percent of all homes sold in April had been on the
market for less than a month, while only 8 percent had been on
the market for a year or longer.
Last month, first-time buyers accounted for 29 percent of
the transactions, with investors buying 19 percent of homes.
Investors, both individuals and institutions, are mostly buying
homes for renting.
Sales were up in three of the four regions, falling 3.4
percent in the Midwest.
(Editing by Andrea Ricci)
Keywords: USA ECONOMY/
(Lucia.Mutikani@thomsonreuters.com)(+1-202-898-8315)(Reuters Messaging: firstname.lastname@example.org)
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