Existing home sales fell 22% in March over last year

Sales also were down 2.4% from February, a sign buyers are holding out to see where interest rates land

WASHINGTON — March existing home sales fell 22% from the same month last year as homebuyers likely balked at buying during a period of still relatively high interest rates.

During the month, 4.4 million homes were sold compared to 5.7 million in March 2022, according to the National Association of Realtors. Sales were down 2.4% from February.

The NAR said that monthly sales declined in three of four major U.S. regions, with sales in the Northeast remaining even with February. All four major regions experienced year-over-year decreases.

The median sales price also dropped .9% from $379,300 last year to $375,000, with prices falling in the West, but rising in all other regions.

Meanwhile, the inventory of unsold properties rose 1% from February to 980,000 by the end of March and up 5.4% from the March 2022 rate of 930,000 units. The March inventory was the equivalent of 2.6 months of supply at the current monthly sales price. This was unchanged from February, but up from two months in March 2022.

Single-family home sales dropped to a seasonally adjusted rate of 3.99 million in March, which was down 2.7% from February and 21.1% from March 2022. The median existing single-family home price was $380,000 in March, which was down 1.4% from March 2022.

Existing condominium and co-op sales totaled 450,000 units in March, which was unchanged from February but down 28.6% in March 2022. The median price was $337,300, up 2.1% from last year.

“Home sales are trying to recover and are highly sensitive to changes in mortgage rates,” said Lawrence Yun, the NAR’s chief economist, adding, “Multiple offers on starter homes are quite common, implying more supply is needed to fully satisfy demand. It’s a unique housing market.”

He added that home prices continue to rise in regions where jobs are being added and housing is relatively affordable.

“However, the more expensive areas of the country are adjusting to lower prices,” he said.

By region, the activity was as follows:

In the Northeast, sales were 520,000 in March, unchanged from February, but down 21.2% from March 2022. The median price was $395,400, up 1% from last year.

In the Midwest, sales totaled 1.03 million, down 5.5% from February and down 17.6% from March 2022. The median price was $273,400, up 1.7% from March 2022.

In the South, 2.07 million homes were sold in March, down 1% from February and down 20.4% from last year. The median price was $347,600, up .3% from March 2022.

In the West, sales fell 3.5% from February to an annual rate of 822,000. This was down 30.5% from the previous year. The median sale price was $565,400, down 7.5% from March 2022.

Other key takeaways from the report were as follows:

+ Properties remained on the market for about 29 days in March, down from 34 days in February but up from 17 days in March 2022. Some 65% of the homes sold during the month were on the market for less than a month.

+ First-time buyers accounted for 28% of sales in March, which was up from 27% in February but down from 30% in March 2022.

+ All-cash sales accounted for 27% of transactions in March, which was down 28% from February and March 2022.

+ Individual investors or second-home buyers that make up many cash sales purchased 17% of the homes in March. This was down from 18% in February and March 2022.

+ Distressed sales including foreclosures and short sales made up 1% of sales in March, about the same as February and March 2022.

+ The 30-year fixed-rate mortgage averaged 6.27% as of April 13, according to Freddie Mac. This compares to 6.28% from February and up from 5% in March 2022.

Thomas Russell

Home News Now Editor-in-Chief Thomas Russell has covered the furniture industry for 25 years at various daily and weekly consumer and trade publications. He can be reached at tom@homenewsnow.com and at 336-508-4616.

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