Sales edged up in the US in March and price growth continues
Home sales in the United States increased for a second month in a row in March but activity is slowing, largely due to affordability constraints and lack of properties for sale, the latest nationwide report from real estate agents shows.
Sales increased by just 1.1% in the 12 months to March 2018 and are now 1.2% below a year ago, according to the index report from the National Association of Realtors (NAR).
Lawrence Yun, NAR chief economist pointed out that there are challenging market conditions in most of the country and robust sales in the Northeast and Midwest have held up the national average with sales falling in other locations.
‘While the healthy economy is generating sustained interest in buying a home this spring, sales are lagging year ago levels because supply is woefully low and home prices keep climbing above what some would be buyers can afford,’ he said.
The index, which excludes new builds, also shows that the median price for all housing types in March was $250,400, up 5.8% from March 2017. Prices have now increased for 73 months in a row year on year.
‘Although the strong job market and recent tax cuts are boosting the incomes of many households, speedy price growth is squeezing overall affordability in several markets – especially those out West,’ Yun explained.
While total housing inventory at the end of March climbed 5.7% to 1.67 million homes available for sale, it is still 7.2% lower than a year ago and has fallen year on year for 34 consecutive months. Unsold inventory is at a 3.6 month supply at the current sales pace compared to 3.8 months a year ago.
A breakdown of the figures shows that sales in the Northeast increased by 6.3% but are still 9.3% below a year ago with a median price if $270,600, which is 3.3% above March 2017.
In the Midwest sales increased 5.7% but are still 1.5% below a year ago while the median price increased by 5.1% year on year to $192,200.
In the South sales were down 0.4% and are 0.4% lower than March 2017 with a median price of $222,400, up 5.7%from a year ago.
Sales fell by 3.1% in the West declined 3.1% but are still 0.8% above a year ago with a median price of $377,100, up 7.9% year on year.