After rising 11.8% month-over month in February, existing-home sales retreated in March, falling 4.9% to a seasonally adjusted annual rate of 5.21 million, according to the National Association of Realtors (NAR).
That’s down 5.4% from 5.51 million in March 2018.
Regionally, existing-home sales fell 7.9% in the Midwest, 6.0% in the West, 3.4% in the South and 2.9% in the Northeast, month over month.
Although economists have been forecasting for a robust spring home buying season, Lawrence Yun, chief economist for NAR, says it is not unusual to see home sales retreat following a major increase such as the one that came in February.
“Still, current sales activity is underperforming in relation to the strength in the jobs markets, Yun says in a statement. “The impact of lower mortgage rates has not yet been fully realized.”
The median existing-home price for all housing types in March (NAR includes condos and co-ops in with its results) was $259,400, up 3.8% from $249,800 in March 2018.
March was the 85th consecutive month that U.S. home prices increased on an annual basis.
Total housing inventory at the end of March increased to 1.68 million, up from 1.63 million existing homes available for sale in February and up 2.4% from 1.64 million a year earlier.
That’s about a 3.9-month supply at the current sales pace, up from 3.6 months in February and up from 3.6 months in March 2018.
“Further increases in inventory are highly desirable to keep home prices in check,” says Yun. “The sustained steady gains in home sales can occur when home price appreciation grows at roughly the same pace as wage growth.”
Properties remained on the market for an average of 36 days in March, down from 44 days in February but up from 30 days a year ago.
Forty-seven percent of homes sold in March were on the market for less than a month.
Yun says tax policy changes will likely add further complications to the housing sector.
“The lower-end market is hot while the upper-end market is not,” he says. “The expensive home market will experience challenges due to the curtailment of tax deductions of mortgage interest payments and property taxes.”
First-time buyers represented about 33% of existing home sales in March, up from 32% in February and up from 30% in March 2018.
Distressed sales – foreclosures and short sales – represented 3% of sales in March, down from 4% the previous month and down from 4% a year earlier.
One percent of March home sales were short sales.