March existing home sales–which are completed transactions that include single-family homes, townhomes, condominiums and co-ops–jumped 5.1% to a seasonally-adjusted annual rate of 5.33 million, up from a downwardly revised 5.07 million in February. March sales were up 1.5% from a year ago.
The housing sales numbers have been quite volatile in the first quarter of 2016. March's rebound comes after a strong start to the year in January, when sales hit their fastest pace in six months, followed by a tumble in February. But sales were up across the U.S. last month, with particular strength in the Northeast (up 11.1%) and Midwest (9.8%) compared to the South (2.7%) and West (1.8%). March's numbers fell within the range anticipated by economists surveyed by
“Closings came back in force last month as a greater number of buyers--mostly in the Northeast and Midwest--overcame depressed inventory levels and steady price growth to close on a home,” said Lawrence Yun, NAR’s chief economist. “Buyer demand remains sturdy in most areas this spring and the mid-priced market is doing quite well. However, sales are softer both at the very low and very high ends of the market because of supply limitations and affordability pressures.”
Prices rose 5.7% year-over-year in March, bringing the median existing home price to $222,700. Last month marked the 49th straight month of year-over-year price gains.
Despite the sales boomerang last month, the housing supply continues to fall short of the six-month inventory level economists consider a healthy market. At the end of March, the supply of available existing housing for sale rose to 1.98 million units, a 4.5-month supply at the current sales pace. That’s up from a 4.4-month supply in February but still 1.5% below the inventory level a year ago (2.01 million). The supply is particularly tight at the low end of the market.
"Existing home sales have been very volatile lately, and have failed to string together more than a couple months in a row of increases before stumbling again," noted Svenja Gudell, Zillow's chief economist. "We'll need to see a few more months like this before fully declaring a breakthrough in existing sales volume and shaking the two-steps forward, one-step back routine the market has been stuck in for a while.”
In another signal that supply is too low, the number of homes selling per real estate professional (3.5) is flat with last year and well below the pre-recession peak of about 5 sales per employee per month, according to Trulia.
“The choppiness in sales activity so far this year is directly related to the unevenness in the rate of new listings coming onto the market to replace what is, for the most part, being sold rather quickly,” said Yun. “Additionally, a segment of would-be buyers at the upper end of the market appear to have been spooked by January’s stock market correction.”
In a note, Ralph McLaughlin, Trulia's chief economist, pointed out that the March ricochet in existing home sales numbers fails to bring the market to a more robust state. "Existing home sales increased 5.1% in March to an annual rate of 5,330,000, but the increase was not enough to make up for the 7.3% drop in February," McLaughlin wrote. "In addition, sales are up just 1.5% from this time last year, suggesting that low inventory of homes for sale continues to dampen both real estate agents' and homebuyers' ability to find homes in the face of solid economic growth. If we discount the large drop in November 2015 home sales because of new disclosure rules introduced last year, March's year-over-year increase was the smallest annual increase since September 2014."
First-time homebuyers comprised 30% of the buyer pool in March, flat with February. Since the Great Recession, first-timers have made up less of the buyer pool than the 40% they typically represented in the past. In 2015 first-time buyers comprised 30% of the buyer pool, up from 29% in 2014 and 2013.
The average rate for a 30-year, conventional, fixed-rate mortgage was 3.69% in March, up from February’s 3.66%, according to
Properties sold on average in 47 days in March, down from 59 days in February and below the 52-day average in March 2015. Forty-two percent of homes sold in March were on the market less than a month.
Distressed sales (foreclosures and short sales) fell in March to 8% of the total from February's 10%; they also comprised 10% of sales in March 2015. February’s rate was the highest share for distressed sales since May 2015, when they were also 10%. Seven percent of existing home sales in March were foreclosures, 1% short sales. Foreclosures sold for an average discount of 16% below market value in March (17% in February); short sales were discounted an average 10% (16% in February).
The share of homes purchased for all-cash was 25% in March, flat with February but up from 24% a year ago. Individual investors, who account for many cash sales, purchased 14% of homes in March, down from 18% in February. Of these individual investors, 66% paid cash in March.
Single-family existing home sales rose 5.5% to a (seasonally adjusted, annual) rate of 4.76 million in March, up from 4.51 million in February and 2.6% above the 4.65 million pace one year before. The median sales price for an existing home was $224,300 in March, up 5.8% from a year earlier.
Condo and co-op sales rose 1.8% to a (seasonally adjusted, annual) pace of 570,000 units in March from 560,000 in February, but were still 6.6% below one year before (610,000 units). The median sales price for a previously-owned condo was $209,600 in March, up 4.6% from a year earlier.
Zillow's chief economist, Svenja Gudell, noted that prices are rising especially quickly at the low end of the market. “Prices overall, especially for condos favored by many first-time and younger buyers, also are rising fast, which could pose challenges to many buyers going forward."
Both the sales pace and median prices were up across the nation in March. Existing home sales rose 11.1% from February to March in the Northeast, hitting an annual rate of 700,000, up 7.7% from a year ago. The median price in the Northeast was $254,100, 5.8% above March 2015. Sales in the Midwest rose 9.8% to an annual rate of 1.23 million in March, up 0.8% from one year ago. The median Midwest price was $174,800, up 7.0% from a year earlier.
Sales rose 2.7% in the South to an annual rate of 2.25 million in March, up 2.3% from March 2015. The median
