M
arket Slump Continues: Existing-Home Sales Decline in March
The National Association of REALTORS reported a 5.9% drop in existing-home sales for March, with all four major U.S. regions experiencing declines. Year-over-year, sales decreased in the Midwest and South, while increasing in the West and remaining unchanged in the Northeast.
According to NAR Chief Economist Lawrence Yun, "affordability challenges associated with high mortgage rates" contributed to the sluggish market. The median existing-home price rose 2.7% from last year to $403,700, with all regions experiencing price increases.
The total housing inventory increased by 8.1% from February and 19.8% from last year, resulting in a 4.0-month supply at the current sales pace. Yun noted that "residential housing mobility, currently at historical lows, signals the troublesome possibility of less economic mobility for society."
In contrast to other markets, household wealth in residential real estate continues to grow, with mortgage delinquencies at near-historical lows. Yun emphasized that a small deceleration in home price gains would be beneficial for affordability.
The REALTORS Confidence Index reported that properties typically remained on the market for 36 days in March, down from 42 days in February but up from 33 days last year. First-time buyers accounted for 32% of sales, while cash sales made up 26% of transactions.
Mortgage rates remain high, with the 30-year fixed-rate averaging 6.83% as of April 17. Single-family home sales retreated 6.4%, while existing condominium and co-op sales remained unchanged.
Regional Breakdown:
* The Northeast saw a 2.0% decline in existing-home sales from February to an annual rate of 490,000.
* The Midwest experienced a 5.0% drop in March to an annual rate of 950,000.
* Existing-home sales in the South contracted 5.7% from February to an annual rate of 1.81 million.
* The West saw a 9.4% decline in existing-home sales to an annual rate of 770,000.
Yun concluded that "a small deceleration in home price gains would be a welcome improvement for affordability."
