US existing home sales plummet in April, but prices gain

Sales of second-hand homes slowed as expected last month, registering their largest one month drop since July 2010, yet prices continued to rise.

According to the Department of Commerce, existing home sales crashed at a 17.8% month-on-month pace in April to reach an annualised pace of 4.33m.

That was more or less in-line with economists' forecasts for a reading of 4.3m.

In comparison to a year ago meanwhile they were down by 17.2%.

"The economic lockdowns – occurring from mid-March through April in most states – have temporarily disrupted home sales," said Lawrence Yun, NAR's chief economist.

"But the listings that are on the market are still attracting buyers and boosting home prices."

The median home price rose at a year-on-year clip of 7.4% to reach $267,000.

The supply of homes available for sale meanwhile increased to the equivalent of 4.2 months worth of sales from 3.4 in March.

"Record-low mortgage rates are likely to remain in place for the rest of the year, and will be the key factor driving housing demand as state economies steadily reopen," Yun said.

"Still, more listings and increased home construction will be needed to tame price growth."