- Existing-home sales are up 5.1 percent to a seasonally adjusted rate of 5.33 million in March.
- The median existing-home sales price rose 5.7 percent to $220,700, which marks the 48th consecutive month of year-over-year gains.
- Although the market is improving, would be first-time buyers are still having a hard time due to the affordability and low availability of starter homes.
In March, The National Association of Realtors (NAR) released its February Pending Home Sales Index, which showed a 3.5 percent increase in pending home sales to 109.1 — the highest PHSI in the past seven months. Furthermore, NAR predicted that existing-home sales would leap forward in March and April.
According to NAR’s March existing-home sales report, Chief Economist Lawrence Yun hit the nail on the head, as existing-home sales increased 5.1 percent to a seasonally adjusted rate of 5.33 million in March from a downwardly revised 5.07 million in February.
Sales rose in all four major regions of the country and are up 1.5 percent year-over-year.
The Northeast region led the country with an 11.1 percent increase to an annual rate of 700,000. The West lagged behind with an increase of 1.8 percent to an annual rate of 1.15 million.
“Closings came back in force last month as a greater number of buyers — mostly in the Northeast and Midwest — overcame depressed inventory levels and steady price growth to close on a home,” Yun said in a press release.
“Buyer demand remains sturdy in most areas this spring and the mid-priced market is doing quite well. However, sales are softer both at the very low and very high ends of the market because of supply limitations and affordability pressures.”
Inventory and sales price growth
The median existing-home sales price rose 5.7 percent to $220,700, which marks the 48th consecutive month of year-over-year gains.
Total housing inventory increased 5.9 percent to 1.98 million homes for sale, which is 1.5 percent lower than last year.
Unsold inventory is at a 4.5 month supply. Yun says the “choppiness” in sales activity is due to buyers’ worries about January’s stock market correction.
Furthermore, distressed sales dropped to 8 percent, which represents 10 percent month-over-month and year-over-year decrease. Seven percent of sales in March were foreclosures and 1 percent were short sales.
First-time homebuyers should be ‘more active’
March’s share of first-time buyers was 30 percent — the same share seen in February 2016 and March 2015.
“With rents steadily rising and average fixed rates well below 4 percent, qualified first-time buyers should be more active participants than what they are right now,” says Yun.
“Unfortunately, the same underlying deterrents impacting their ability to buy haven’t subsided so far in 2016. Affordability and the low availability of starter homes is still a major barrier for them in most markets.”