Existing-home sales decreased in March for the second straight month, the National Association of Realtors (NAR) said today.
Month-over-month, sales in March fell in three of the four major U.S. regions, while holding steady in the West, NAR said. Sales were down across each region year-over-year.
Total existing-home sales — completed transactions that include single-family homes, townhomes, condominiums, and co-ops — dipped 2.7% from February to a seasonally adjusted annual rate of 5.77 million in March, the NAR said..
Year-over-year, sales fell 4.5% from 6.04 million in March 2021.
"The housing market is starting to feel the impact of sharply rising mortgage rates and higher inflation taking a hit on purchasing power," Lawrence Yun, NAR's chief economist, said. "Still, homes are selling rapidly, and home price gains remain in the double-digits."
With mortgage rates expected to continue rising, Yun predicted transactions will contract by 10% this year; for home prices to readjust; and for gains to grow around 5%.
Housing inventory totaled 950,000 units, up 11.8% from February but down 9.5% from a year earlier, NAR said. Unsold inventory sits at a 2-month supply at the present sales pace, up from 1.7 months in February but down from 2.1 months in March 2021.
The median existing-home price for all housing types in March was $375,300, up 15% from March 2021 ($326,300), as prices rose in each region. It marked 121 consecutive months of year-over-year increases, the longest streak on record, NAR said.
"Home prices have consistently moved upward as supply remains tight," Yun said. "However, sellers should not expect the easy-profit gains and should look for multiple offers to fade as demand continues to subside."
Properties typically remained on the market for 17 days in March, down from 18 days in February and 18 days in March 2021. Of the homes sold in March 2022, 87% were on the market for less than a month, NAR said.
First-time homebuyers were responsible for 30% of sales in March, up from 29% in February but down from 32% in March 2021. NAR's 2021 Profile of Home Buyers and Sellers — released in late 20214 — reported that the annual share of first-time buyers was 34%.
"It appears first-time homebuyers are still looking to lock in at current mortgage rates before they inevitably increase," Yun said.
Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in March, down from 19% in February but up from 15% in March 2021. All-cash sales accounted for 28% of transactions in March, up from both the 25% recorded in February and from 23% in March 2021.
"With rising mortgage rates, cash sales made up a larger fraction of transactions, climbing to the highest share since 2014," Yun said.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.17% in March, up from 3.76% in February. The average commitment rate across all of 2021 was 2.96%.
Single-family and Condo/Co-op Sales
Single-family home sales decreased to a seasonally adjusted annual rate of 5.13 million in March, down 2.7% from 5.27 million in February and down 3.8% from a year ;earlier. The median existing single-family home price was $382,000 in March, up 15.2% from March 2021.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 640,000 units in March, down 3% from 660,000 in February and down 9.9% from a year ago. The median existing condo price was $322,000 in March, an annual increase of 11.9%.
"Finding the right home in this market — from making an offer to eventually buying — is an intense process," said NAR President Leslie Rouda Smith, a Realtor from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. "The current state of housing is indeed one of the most competitive markets that I have witnessed, but with patience and the assistance of a trusted Realtor®, the outcome can be very rewarding."
Regional Breakdown
Northeast: Existing-home sales slid 2.9% in March, recording an annual rate of 670,000, down 11.8% from March 2021. The median price in the Northeast was $390,200, up 6.8% from a year ago.
Midwest: Existing-home sales declined 4.5% from the prior month to an annual rate of 1,270,000 in March, a 3.1% drop from March 2021. The median price in the Midwest was $271,000, a 10.4% jump from March 2021.
South: Existing-home sales dipped 3.0% in March from the prior month, registering an annual rate of 2,620,000, a decrease of 3.0% from one year ago. The median price in the South was $339,000, a 21.2% surge from one year prior. For the seventh straight month, the South experienced the highest pace of price appreciation in comparison to the other three regions.
West: Existing-home sales held steady compared to the previous month, posting an annual rate of 1,210,000 in March, down 4.7% from one year ago. The median price in the West was $519,900, up 5.4% from March 2021.
The National Association of Realtors is America's largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.
