Existing-Home Sales Spring Forward in March

The housing market started 2017 at a running pace, but then dropped back in February. The latest National Association of RealtorsⓇ’ (NAR) monthly report speaks of another significant jump forward in March. Existing-home sales reached their highest pace in 10 years, and severe housing shortages meant shorter times on market compared to both the last month and year over year numbers.

Continue reading for a full housing market breakdown.

Existing-Home Sales

Sales across the nation averaged a 4.4% increase from February. Sales were also up noticeably year over year at a 5.9% increase from March 2016. Existing-home sales in the South rose 3.4% for the month to an annual rate of 2.42 million, 8.5% above March 2016, surpassing January as the strongest month of sales since February 2007. Locally, Beverly-Hanks reported in our Q1 2017 Market Report an existing-home sales increase of 8.2% YOY.

NAR’s chief economist, Lawrence Yun, says sales this spring have come in like a lion, and have no intention of going out like a lamb:

“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. 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.”

Existing-home sales, March 2016 to March 2017

Median Home Prices

While existing-home sales have seen some dips and peaks so far this year, YOY home prices continue to climb steadily each month. The U.S. March median existing-home price for all housing types (single-family homes, townhomes, condominiums, and co-ops) was $236,400, a 6.8% increase from March 2016 ($221,400). March now marks the 61st consecutive month of year-over-year gains.

Regionally, the median price in the South was $210,600, up 8.6% from one year ago. Locally, Beverly-Hanks reported in our Q1 2017 Market Report a median regional sales price of $229,750, up 9.4% from $210,000 in Q1 2016.

 

______________________________________________________________________________________

Region

Median Home Price

(Mar. 2017)

Median Price Increase

(Mar. 2016 to Mar. 2017)

U.S.

$236,400

+6.8%

South

$210,600

+8.6%

WNC

$229,750 (Q1)

+9.4% (Q1)

______________________________________________________________________________________

Median home prices, March 2016 to March 2017

Housing Inventory

The tight housing market continues to be reflected in March’s total housing inventory, though gains were made. Total housing inventory at the end of March increased 5.8%, but is still 6.6% lower than a year ago. This is the 22nd consecutive month of year-over-year declines in inventory. Properties on the market sold in an average of 34 days during this period, down from 45 days in February and 47 days in March 2016. According to NAR, 48% of homes sold in March were on the market for less than a month.

The lack of housing supply paired with increasing home prices has been a burden for homebuyers of all types, especially lower income and first-time buyers—a burden that cannot be alleviated without the introduction of additional inventory. Yun said, “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.” He continued:

“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.”

Mortgage Rates

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage rose for the fifth straight month in March. Rates are now 4.20% compared to 4.17% in February. The average commitment rate for all of 2016 was 3.65%.

NAR President William E. Brown advises prospective buyers to practice patience as much as possible:

“Realtors® in most markets are saying interest from first-timers is up this year, but competition is stiff for listings in their price range. 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.”

 

Read more about existing-home sales on NAR. Locally, homes sales are mirroring many of the national trends. View the Beverly-Hanks Q1 2017 Market Report to see how home sales are growing in your community.

 

 

 

HAVE A QUESTION?

Back to News

Leave a Reply