Home prices rose in March, with with a strong job market and low interest rates, economists think sales of existing homes should recover (JOE RAEDLE)

Washington (AFP) – Sales of existing US homes fell for the second straight month in April as prices increased despite rising supplies of homes for sale, according to an industry survey Tuesday.

But the unexpected dip came amid low mortgage rates and continued job growth, suggesting sales should recover, according to the National Association of Realtors.

The two-month decline could cut short a recovery from last year, when extended weakness in home sales stoked fears the American economy was slowing.

Total sales of single-family homes, condos, townhomes and co-ops fell 0.4 percent for the month to an annual rate of 5.19 million units, seasonally adjusted, extending the deep decline in March.

That put sales 4.4 percent below the same month last year, with the sales pace declining in all four regions of the country.

Economists had been expecting an increase from March. Sales dropped in the Northeast and South but rose in the Midwest and West compared to the prior month.

Lawrence Yun, NAR’s chief economist, said he was not overly concerned because home buyers likely will take advantage of historically low mortgage rates.

“Also, job creation is improving, causing wage growth to align with home price growth, which helps affordability and will help spur more home sales,” he said.

The median price rose 3.6 percent over April of last year to $267,300. Meanwhile, inventories rose 1.7 percent over the same period to 1.83 million homes for sale.

Ian Shepherdson of Pantheon Macroeconomics agreed that, while April was “disappointing,” the trend in pending home sales and mortgage applications was nevertheless pointing upward amid lower mortgage rates and steady job growth.

“Existing home sales ought to return to their late 2017 cycle peak during the summer, if the rising trend in mortgage applications is any guide,” he said in a research note.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.