Existing-home sales fell 4.9 percent in March, with all four major regions of the U.S. seeing a decline, the National Association of REALTORS® reported Monday. The drop follows a surge in sales the previous month. “It is not surprising to see a retreat after a powerful surge in sales in the prior month,” says NAR Chief Economist Lawrence Yun. “Still, current sales activity is underperforming in relation to the strength in the job markets. The impact of lower mortgage rates has not yet been fully realized.”
Total existing-home sales—completed transactions for single-family homes, townhomes, condos, and co-ops—dropped 4.9 percent from February to a seasonally adjusted annual rate of 5.21 million in March. Sales are down 5.4 percent from a year ago, NAR’s data shows.
Yun notes that sluggish housing inventories and tax policy changes may also impact housing. “The lower-end market is hot while the upper-end market is not,” Yun says. “The expensive home market will experience challenges due to the curtailment of tax deductions of mortgage interest payments and property taxes.”
Here’s a closer look at some key indicators from March home sales, according to NAR’s latest housing report.
- Home prices: The median existing-home price was $259,400 in March, up 3.8 percent from a year ago.
- Days on the market: Forty-seven percent of homes sold in March were on the market for less than a month. Properties remained on the market an average of 36 days in March, up from 30 days a year ago.
- Housing inventories: At the end of March, inventories rose to 1.68 million, a 2.4 percent increase from a year ago. Unsold inventory is at a 3.9-month supply at the current sales pace. “Further increases in inventory are highly desirable to keep home prices in check,” says Yun. “The sustained steady gains in home sales can occur when home price appreciation grows at roughly the same pace as wage growth.”
- Cash sales: Deals in which the buyer paid cash comprised 21 percent of all transactions in March, up from 20 percent a year ago. Individual investors tend to account for the bulk of cash sales. They purchased 18 percent of homes in March, up from 16 percent a year ago.
- Distressed sales: Foreclosures and short sales represented 3 percent of sales in March, down from 4 percent a year ago. One percent of sales last month were short sales.
