NEW YORK — The housing market surged in April, with home affordability at record levels.
Sales hit 4.62 million homes during the month on an annualized basis, a rise of 3.4% compared with a month earlier and up 10% from April 2011, according to the National Association of Realtors.
NAR reported that the median price for homes sold during the month was $177,400. That's a jump of more than 10% compared with a year earlier.
The housing market's improvement was widespread, as all four regions in the nation recorded gains. That's a good indication that there is a sustainable recovery afoot, according to Gus Faucher, a senior economist for PNC Financial.
"The fundamentals for a recovery have been in place for a while," he said. "Only confidence was lacking." A decline in the proportion of distressed property sales -- homes either in default or already repossessed by lenders -- helped boost home prices. These properties normally sell at big discounts to conventional sales and drag down the overall median price.
In April, distressed properties accounted for 28% of sales, down from 37% 12 months earlier.
Pat Newport, a housing market analyst at IHS Global Insight, said he thinks the market is turning but that it will be a slow process. "The market won't pick up much steam this year," he said. "The key issue is credit: It's still tight both for mortgage borrowers and for home builders."
There's no sign that credit will loosen up anytime soon, but the fact that interest rates are at record lows does make financing easier for buyers.
NAR chief economist Lawrence Yun notes that it's no longer just investors who are jumping into the market. "A return to normal home buying for occupancy is helping home sales across all price points," he said.
As prices stabilize, homeowners may be encouraged to put their homes on the market. Inventory rose 9.5% to 2.54 million homes in April, which is common in the spring, as sellers try to capitalize on the selling season.
Overall, the supply of homes for sale has dropped more than 20% from 12 months ago and is well down from the record high of 4.04 million in July 2007.