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Existing-home sales dropped off considerably in March despite nearing the peak of the Spring homebuying season, demonstrating the hold elevated interest rates continue to have on home sales.
Existing-home sales retreated 4.3 percent between February and March to a seasonally adjusted annual rate of 4.19 million, and were down 3.7 percent from March 2023 according to data released Thursday by the National Association of Realtors.
Despite the slow sales, prices for existing homes continued to rise. The median existing home sale price jumped 4.8 percent from March 2023 to $393,500 — the ninth consecutive month of year over year price gains and the highest ever price for the month of March according to the NAR.
“Though rebounding from cyclical lows, home sales are stuck because interest rates have not made any major moves,” said NAR Chief Economist Lawrence Yun. “There are nearly six million more jobs now compared to pre-COVID highs, which suggests more aspiring home buyers exist in the market.”
Rates for a 30-year mortgage averaged 6.88 percent as of April 11 according to Freddie Mac — up slightly from 6.82 the previous week and 6.27 a year ago.
The inventory of unsold existing homes grew 4.7 percent from the previous month to 1.11 million at the end of March, equal to 3.2 months supply at the current sales pace, a welcome spike in inventory according to Yun.
“More inventory is always welcomed in the current environment,” Yun added. “Frankly, it’s a great time to list with ongoing multiple offers on mid-priced properties and, overall, home prices continuing to rise.”
Prices rose in every region of the country, rising 9.9 percent annually in the Northeast to $434,600, 7.5 percent in the Midwest to $292,400, 3.4 percent in the South to $359,100 and 6.7 percent in the West to $603,000.
Sales dropped on a monthly basis in all regions but the Northeast, where they climbed 4.2 percent from February but were down 3.8 percent from a year ago. In the Midwest sales retreated 1.9 percent from February and were down 1 percent from a year prior, while the South saw sales fade 5.9 percent from February and 5 percent from March 2023. In the West, existing-home sales slumped 8.2 percent from February and declined 3.7 percent from the previous year, according to the NAR.
March’s slump came after a strong February for existing-home sales, which saw sales jump 9.5 percent from January’s levels.
