Home Sales Drop 3.3% in April

Contract closings on previously owned properties unexpectedly dropped 3.3% to a 5.04 million annualized rate in April after a 5.21 million pace that was the strongest in almost two years, figures from the National Association of Realtors showed May 21. Prices jumped the most since the start of 2014 as the inventory of houses on the market declined from the same time last year.

“Confidence in the housing market is still a little bit tentative,” said Tom Simons, a money market economist at Jefferies in New York, whose projection for 5.1 million sales was among the closest in the Bloomberg survey. “We’ll start to see some more progress, but there are some roadblocks in the way for housing that won’t allow it to explode to the upside.”

The rebound in residential real estate has been stop-and-go as small wage gains and lingering concerns about taking on more debt offset the benefits of historically low mortgage rates. In order to strengthen, the economy needs more pronounced momentum from housing as manufacturing remains sluggish.