The spring homebuying and selling season is off to a solid start.
Home prices are rising at a moderate pace. Home sales are strong, but still below last year’s pace as rising prices squeeze affordability and record low listings limit the choices buyers have, according to new data from the Buffalo Niagara Association of Realtors.
Overall, the fundamentals of the housing market still are squarely tilted in favor of sellers, with only enough homes on the market to absorb 2 1/2 months worth of sales at the current pace. A housing market is generally considered to be in balance between buyers and sellers when there is a six-month supply of homes for sale.
“For well-priced homes in desirable locations, competition is fierce,” the local real estate group said in its monthly report.
Home prices aren’t rising as fast as they were during the late spring last year, but they’re still rising steadily. With the number of homes for sale at a more than 20-year low, the median price of the homes that sold during April rose 6.3% to $144,501.
While that was a record high for April, the increase was slightly slower than the 7.5% rise in median prices during all of last year.
With buyers scrambling for a small supply of homes and grappling with steadily rising prices, the pace of home sales has been slowing for two straight years.
After falling by 1.6% during 2017, home sales dropped by 2% last year, based on revised data from the real estate trade group. The trend continued into April, with sales over the preceding 12 months down by 3.6%.
The number of homes for sale fell by 1.7% last month – extending a seven-year decline in inventory that had been briefly interrupted by a small uptick in listings during January.
But new listings rose by nearly 5% during April, and are running 1% above last year’s pace through the first four months of the year – a sign that the inventory shortage could be bottoming out.
Homes still are selling briskly in a market with low inventory and mortgage rates still relatively low. The average home that sold during April was on the market for 55 days, the same as last April, but 18 days faster than 2016.
Home sellers also are able to hold fairly firm to their asking price. The average home that sold last month went for 97.6% of its most recent asking price.