U.S. Existing Home Sales Decline 3.3% in April

WASHINGTON—Sales of previously owned homes fell in April after surging the previous month, highlighting the fits and starts that have been a hallmark of the housing recovery.

Existing-home sales declined 3.3% last month from March to a seasonally adjusted annual rate of 5.04 million, the National Association of Realtors said Thursday. Sales for March were revised up to 5.21 million from an initially reported 5.19 million.

Economists surveyed by The Wall Street Journal had expected April sales would increase to a pace of 5.24 million.

Sales in April were up 6.1% from the same month a year earlier.

News Corp, owner of The Wall Street Journal, also owns Move Inc., which operates a website and mobile products for the National Association of Realtors.

"The latest decline is not a concern regarding somehow the buyers losing enthusiasm," NAR chief economist Lawrence Yun said. While interest in buying a new home remains strong, "we just don't have enough supply."

The median sale price for a previously owned home was up 8.9% from a year earlier to $219,400 in April, the biggest increase since January 2004, NAR said. That price is just shy of the peak reached in 2006, when the median sale price for the year was $221,900.

Existing home sales fell slightly in 2014, despite a modest uptick in the second half of the year as the labor market strengthened and mortgage rates remained at historic lows.

Sales of existing homes, which account for roughly 90% of all purchases in the U.S., have been constrained by rising prices, limited inventories and tight credit.

At the current sales pace, it would take 5.3 months to exhaust the supply of homes on the market, NAR said Wednesday. Total housing inventory at the end of April increased 10%, to 2.21 million existing homes available for sale.

Home construction, which is a key to boosting housing supplies, is showing signs of a pickup. U.S. housing starts rose by 20.2% from a month earlier to a seasonally adjusted annual rate of 1.135 million in April, the Commerce Department said Tuesday. That was the highest reading since November 2008.

But Mr. Yun said the increase was "insufficient."

"Rents are also rising above income, people are getting squeezed on housing and it looks like this will continue because of the cumulative impact of undersupply in new home construction for the past eight years," he said.

Write to Kate Davidson at [e-mail] and Jeffrey Sparshott at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires