Existing-home sales leaped to their highest pace in 10-plus years in March, reaching a robust level of activity not seen since February 2007, the National Association of REALTORS® (NAR) reports.
Existing-home sales totaled 5.71 million last month, a 4.4 percent increase from February and 5.9 percent increase from one year prior. Inventory increased, as well, by 5.8 percent to 1.83 million—though still 6.6 percent below one year prior.
“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,” says Lawrence Yun, chief economist at NAR. “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.”
Inventory is currently at a 3.8-month supply—no different from February, according to NAR. Existing homes averaged 34 days on market in March, 11 fewer days than in February and 13 fewer days than one year prior. Non-distressed homes took 32 days to sell. All told, 48 percent of homes sold in March were on the market for less than one month.
The metropolitan areas with the fewest days on market in March, according to data from realtor.com®, were San Jose-Sunnyvale-Santa Clara, Calif. (24 days); San Francisco-Oakland-Hayward, Calif. (25 days); Seattle-Tacoma-Bellevue, Wash. (28 days); Denver-Aurora-Lakewood, Colo. (28 days); and Vallejo-Fairfield, Calif. (31 days).
The median existing-home price for all types of houses (single-family, condo, co-op and townhome), at the same time, was $236,400—a 6.8 percent increase from one year prior. The median price for a single-family existing home was $237,000, while the median price for an existing condo was $224,700.
“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,” Yun says. “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.”
Single-family existing-home sales came in at 5.08 million in March, a 4.3 percent increase from 4.87 million in February and a 6.1 percent increase from 4.79 million one year prior. Existing condo and co-op sales came in at 630,000, a 5 percent increase from both February and one year prior.
Twenty-three percent of existing-home sales in March were all-cash, compared to 15 percent by individual investors. Six percent were distressed.
Existing-home sales in the Northeast posted a strong 10.1 percent gain in March to 760,000, with a median price of $260,800. Existing-home sales in the Midwest showed a similar path, up 9.2 percent to 1.31 million, with a median price of $183,000.
Existing-home sales in the South and West covered less ground in March, with sales in the South rising 3.4 percent to 2.42 million, with a median price of $210,600, and sales in the West falling 1.6 percent to 1.22 million, with a median price of $347,500.
First-time homebuyers comprised 32 percent of existing-home sales in March.
“The spring housing market is off to an early and strong start,” says realtor.com Senior Economist Joseph Kirchner, Ph.D. “With existing-home sales for March at the highest level since the 2008 recession, the limited number of homes that are on the market are likely to move fast. One of the most notable trends is the divide between affordable and premium homes. Over the last year home sales under $100,000 fell 7.1 percent while sales between $500,000 and $750,000 went up by 32.1 percent, due to builders’ focus on the higher-end market.”
He adds, “The biggest opportunity in the spring housing market may be the temporary drop in mortgage rates. This is the time for homebuyers who have identified a home to purchase to pull the trigger and lock in a low rate.”
“REALTORS® in most markets are saying interest from first-timers is up this year, but competition is stiff for listings in their price range,” says NAR President Bill Brown. “The best advice is to lean on the guidance of a REALTOR® throughout the home search and be careful about stretching the budget too far. Don’t get frustrated by losing out on a home and know the right one will eventually come along in due time.”