Existing home sales in the United States took off in March to their highest pace in over 10 years, and severe supply shortages resulted in the typical home coming off the market significantly faster than in February and a year ago.
Only the West of the nation saw a decline in sales activity in March, according to the total existing sales index from the National Association of Realtors (NAR).
The index also shows that the median existing home price for all housing types in March was $236,400, up 6.8% from March 2016 and it was the 61st consecutive month of year on year gains.
Overall sales were up by 4.4% to a seasonally adjusted annual rate of 5.71 million in March from a downwardly revised 5.47 million in February. March’s sales pace is 5.9% above a year ago and surpasses January as the strongest month of sales since February 2007.
Lawrence Yun, NAR chief economist, pointed out that the existing sales surge was led by hefty gains in the Northeast and Midwest. ‘The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month,’ he said.
‘Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings in March for sales to muster a strong gain. Sales will go up as long as inventory does,’ he added.
Total housing inventory at the end of March increased 5.8% to 1.83 million but is still 6.6% lower than a year ago and has fallen on an annual basis for 22 consecutive months. Unsold inventory is at a 3.8 month supply at the current sales pace, unchanged from February.
‘Bolstered by strong consumer confidence and underlying demand, home sales are up convincingly from a year ago nationally and in all four major regions despite the fact that buying a home has gotten more expensive over the past year,’ Yun explained.
Properties typically stayed on the market for 34 days in March, which is down significantly from 45 days in February and 47 days a year ago. Short sales were on the market the longest at a median of 90 days in March, while foreclosures sold in 52 days and non-distressed homes took 32 days, the shortest since NAR began tracking in May 2011 while some 48% of homes sold in March were on the market for less than a month.
‘Last month’s swift price gains and the remarkably short time a home was on the market are directly the result of the homebuilding industry’s struggle to meet the dire need for more new homes,’ said Yun.
‘A growing pool of all types of buyers is competing for the lacklustre amount of existing homes on the market. Until we see significant and sustained multi-month increases in housing starts, prices will continue to far outpace incomes and put pressure on those trying to buy,’ he pointed out.
A breakdown of the figures show that existing condominium and co-op sales increased 5% and are now 5% higher than a year ago. The median existing condo price was $224,700 in March, which is 8% above a year ago.
March existing home sales in the Northeast surged 10.1% and are now 4.1% above a year ago. The median price in the Northeast was $260,800 which is 2.8% above March 2016 while in the Midwest sales jumped 9.2% and are now 3.1% with a median price of $183,000, up 6.2% year on year.
Existing home sales in the South rose 3.4% and are now 8.5% above March 2016 with a median price of $210,600, up 8.6% from a year ago while in the West sales fell by 1.6% but are still 5.2% above a year ago with a median price of $347,500, up 8% from March 2016.
