Highlights

Existing home sales rebounded and increased from 4.47 mln in March to 4.62 mln in April. The Briefing.com consensus expected sales to increase to 4.65 mln.

Key Factors

For the second consecutive month, sales were tempered by softening investor demand that resulted from a lack of inventory of distressed properties in highly desirable areas. Distressed sales, which accounted for 34% of sales as recently as February and 37% of sales in April 2011, accounted for only 29% of sales in March and 28% of sales in April.
Affordable conditions, however, helped bring first-time buyers into the market as sales to this group increased from 33% in March to 35% in April. This offset the drop in investor demand and helped drive overall sales back to January/February levels.
Without distressed sales weighing down prices, the median home price jumped 10.1% y/y in April to $177,400. That is up from a 3.1% y/y increase in March.
As bank-owned properties return to the market place, we suspect that year-over-year price gains will moderate.

Home affordability measures remain near all-time highs, but a combination of hesitant buyers and credit constraints are keeping existing home sales growth from experiencing a true breakout period. Instead, sales should move on a slow, upward -- but choppy -- path.

Category	APR	MAR	FEB	JAN	DEC
Existing Home Sales	4.62M	4.47M	4.60M	4.63M	4.38M
Months Supply	6.6	6.2	6.3	6.0	6.4
Median Price Y/Y	10.1%	3.1%	-0.3%	-2.1%	-3.9%