Existing Home Sales Rebound, Jobless Claims Tick Up

existing home sales
Matt York/AP

By Lucia Mutikani and Jason Lange

U.S. home resales rose in April and the supply of properties on the market hit its highest level since August 2012, hopeful signs for the stalled housing market recovery.

Other data Thursday showed a jump in first-time applications for unemployment benefits, although the underlying trend still pointed to a strengthening in labor market conditions.

The National Association of Realtors said existing home sales increased 1.3 percent to an annual rate of 4.65 million units, marking the second increase in sales in nine months.

While that was a bit less than the 4.68 million unit pace economists had expected, it suggested the sector was regaining its footing after stumbling in the second half of 2013 under the weight of higher mortgage rates and house prices.

"The spring housing market may be a little late to bloom but the increase in sales is welcome news showing increased confidence in the economy," said Bill Banfield, vice president of Quicken Loans.

Sales are still down 15 percent from a peak of 5.38 million units hit in July. Compared to April last year, sales were down 6.8 percent.

Expensive home loans and rising home prices have sidelined first-time buyers from the market. Investors also are stepping back.

Though an usually cold winter depressed activity, a dearth of homes for sale also stymied demand. Sales are expected to gradually trend higher for the rest of 2014 as job growth and the overall economy accelerate.

%VIRTUAL-article-sponsoredlinks%And there is reason to be optimistic. The inventory of unsold homes on the market increased 6.5 percent from a year-ago to 2.29 million in April and the median home price increased at its slowest pace since March 2012.

"The sales slowdown experienced is pretty much coming to an end," said Lawrence Yun, the NAR's chief economist.

The months' supply of existing homes increased to 5.9 months, the highest since August 2012, from 5.1 months in March. Six months' supply is normally considered a healthy balance between supply and demand.

"The biggest story to come out of this report is the boost in home inventory, which has been one of the key issues holding back both buyers and sellers in the first part of this year," Banfield said.

In a separate report, the Labor Department said initial claims for state unemployment benefits rose 28,000 to 326,000 for the week ended May 17. The four-week average, which irons out week-to-week volatility, rose by only 10,500.

Last week's claims data covered the survey period for May nonfarm payrolls. With claims rising between the April and May survey periods, job growth probably slowed from April's brisk 288,000 gain in April.

The claims report showed the number of people still receiving benefits after an initial week of aid fell 13,000 to 2.65 million in the week ended May 10.

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