U.S. sales are “highly sensitive to changes in mortgage rates” says NAR Economist Yun. March inventory rose a meager 1% and prices were down 0.9%.
WASHINGTON – U.S. existing-home sales edged lower in March, according to the National Association of Realtors® (NAR). Month-over-month sales declined in three out of four major U.S. regions included in the report and remained steady in the Northeast.
All regions posted year-over-year decreases.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – fell 2.4% from February to a seasonally adjusted annual rate of 4.44 million in March. Year-over-year, sales fell 22.0% (down from 5.69 million in March 2022).
“Home sales are trying to recover and are highly sensitive to changes in mortgage rates,” says NAR Chief Economist Lawrence Yun. “Yet, at the same time, multiple offers on starter homes are quite common, implying more supply is needed to fully satisfy demand. It’s a unique housing market.”
Total housing inventory at the end of March was 980,000 units, up 1.0% from February and 5.4% from one year ago (930,000). Unsold inventory is at a 2.6-month supply at the current sales pace, unchanged from February and up slightly year-to-year (2.0 months in March 2022).
“Home prices continue to rise in regions where jobs are being added and housing is relatively affordable,” Yun says. “However, the more expensive areas of the country are adjusting to lower prices.”
Other report findings
- The median existing-home price for all housing types in March was $375,700, a decline of 0.9% from March 2022 ($379,300). Prices climbed slightly in three regions but dropped in the West.
- Properties typically remained on the market for 29 days in March, down from 34 days in February but up from 17 days in March 2022. Almost two out of three homes listed for sale (65%) in March were on the market for less than a month.
- At 28%, the percentage of March first-time buyers remained fairly steady, up from 27% in February and down from 30% in March 2022.
- All-cash sales accounted for 27% of March transactions, down from 28% in February and March 2022.
- Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in March, down from 18% in February and the previous year.
- Distressed sales – foreclosures and short sales – represented 1% of sales in March, nearly identical to last month and one year ago.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.27% as of April 13. That’s down from 6.28% from the previous week but up from 5% one year ago.
“With overall consumer price inflation calming and rents expected to decelerate from robust apartment construction, the Federal Reserve’s monetary policy will surely shift from tightening to neutral to possibly loosening over the next 12 months,” Yun predicts. “Therefore, home sales will steadily rebound despite several months of fluctuations.”
Single-family and condo/co-op sales: Single-family home sales faded to a seasonally adjusted annual rate of 3.99 million in March, down 2.7% from 4.10 million in February and 21.1% from one year ago. The median existing single-family home price was $380,000 in March, down 1.4% year-to-year.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 450,000 units in March. That number is identical to February and down 28.6% year-to-year. The median existing condo price was $337,300 in March, an annual increase of 2.1%.
March regional breakdown: Existing-home sales in the Northeast were unchanged from February at an annual rate of 520,000 in March, but they’re down 21.2% from March 2022. The median price in the Northeast was $395,400, up 1.0% year-to-year.
In the Midwest, existing-home sales fell 5.5% month-to-month (annual rate of 1.03 million), and 17.6% year-to-year. The median price in the Midwest was $273,400, up 1.7% compared to March 2022.
Existing-home sales in the South fell 1.0% in March from February to an annual rate of 2.07 million, and 20.4% decrease year-to-year. The median price in the South was $347,600, an increase of 0.3% from one year ago.
In the West, existing-home sales declined 3.5% from the previous month to an annual rate of 820,000, down 30.5% from the prior year. The median price in the West was $565,400, down 7.5% from March 2022.
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