Home resales in the United States rose in April as foreclosure auctions and improved affordability spurred bargain hunters.
Purchases increased 2.9%, to an annual rate of 4.68 million, in line with forecasts, from 4.55 million in March, the National Association of Realtors said Wednesday.
The median price slumped 15% from a year earlier, the second-biggest drop on record, and distressed properties accounted for 45% of all sales.
"An increase in affordability has seemingly enticed potential homebuyers," Michelle Meyer, an economist at Barclays PLC's investment bank in New York, said before the report came out.
"We believe home sales have stabilized."
The median forecast of 72 economists surveyed by Bloomberg News called for a 2% rise in resales, to a 4.66 million annual rate, from a previously reported 4.57 million pace in March.
Estimates ranged from rates of 4.47 million to 4.8 million for April.
Sales were down 3.5% compared with a year earlier.
The number of houses on the market climbed 8.8%, to 3.97 million in April, reflecting the gains usually associated with this time of year, the Realtor group said. At the current sales pace it would take 10.2 months to sell those homes, up from 9.6 months in March.
Resales of single-family homes increased 2.5%, to an annual rate of 4.18 million. Sales of condominiums and co-ops rose 6.4%, to a 500,000 rate.
Leading the April gains were increases of 12% in the Northeast and 3.5% in the West. Purchases also climbed in the South and fell in the Midwest.
The share of distressed sales last month was down from March, reflecting normal volatility, the Realtor group said. First-time buyers accounted for about 40% of April sales, also down from March, the group said.
Still, "it's a nonregular market in terms of so much distressed sales activity," Lawrence Yun, the group's chief economist, said in a press briefing. The market is led by gains in sales of lower-priced properties, while there is "very little" activity at higher price points, Yun said.
Multiple bids are now common on foreclosure sales, while properties selling for $750,000 or more are taking 40 months to sell on a median basis, Yun said. Higher mortgage rates for jumbo loans are one reason for the disparity, he said.
The Obama administration's stimulus plan provided an $8,000 tax credit for first-time homebuyers for purchases completed before Dec. 1. Lower mortgage costs are also helping to make buying more affordable.
"The housing market is beginning to stabilize," Federal Reserve Board Chairman Ben S. Bernanke said in congressional testimony on May 5.