Total existing-home sales soared by 4.4 percent to a seasonally adjusted annual rate of 5.71 million in March from a downwardly revised 5.47 million in February, according to new data from the National Association of Realtors (NAR). On a year-over-year basis, March’s sales pace is up 5.9 percent—and it also surpasses January as the strongest month of sales since February 2007 (5.79 million).
Lawrence Yun, NAR chief economist, says existing sales roared back in March and were 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,” Yun 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.”
Also on the rise was the median existing-home price for all housing types: $236,400, up 6.8 percent from the March 2016 level of $221,400. March’s price increase is the 61st consecutive month of year-over-year gains.
And even inventory levels rose, at least on a month-by-month basis. Total housing inventory at the end of March was up 5.8 percent to 1.83 million existing homes available for sale. However, inventory is still 6.6 percent lower than a year ago (1.96 million) and has been dropping year-over-year for 22 straight months. The unsold inventory level of a 3.8-month supply at the current sales pace was unchanged from February.
Properties typically stayed on the market for 34 days in March, a big drop from 45 days in February and 47 days a year ago. But more newcomers to the housing market were in search of purchases: first-time homebuyers accounted for 32 percent of sales in March, which is unchanged from February and up by two percent a year ago.
“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 lackluster 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.”