Existing-home sales were at a seasonally adjusted annual rate of 5.60 million in March, an increase of 1.1% compared with 5.54 million in February, according to the National Association of Realtors (NAR).
It was the second consecutive month that existing-home sales increased.
However, sales were 1.2% below a year ago, due mainly to a lack of inventory and affordability constraints.
Regionally, existing-home sales increased 6.3% in the Northeast and 5.7% in the Midwest. But they were down 3.1% in the West and 0.4% in the South.
Basically, the headwinds of low inventory and high home prices are countering pent-up demand – and in any given month, one may prevail over the other.
“The unwelcoming news is that while the healthy economy is generating sustained interest in buying a home this spring, sales are lagging year ago levels because supply is woefully low and home prices keep climbing above what some would-be buyers can afford,” says Lawrence Yun, chief economist for NAR, in a statement.
The median existing-home price for all housing types (including condos and co-ops) in March was $250,400, up 5.8% from $236,600 in March 2017.
March’s price increase marks the 73rd straight month of year-over-year gains.
“Although the strong job market and recent tax cuts are boosting the incomes of many households, speedy price growth is squeezing overall affordability in several markets – especially those out West,” Yun says.
As of the end of March, there were about 1.67 million existing-homes available for sale, down 7.2% compared with 1.80 million a year earlier. That’s about a 3.6-month supply at the current sales pace.
Properties typically stayed on the market for 30 days in March, down from 37 days in February and 34 days a year ago.
Roughly 50% of homes sold in March were on the market for less than a month, according to NAR’s data.
“Realtors throughout the country are seeing the seasonal ramp-up in buyer demand this spring but without the commensurate increase in new listings coming onto the market,” Yun says. “As a result, competition is swift and homes are going under contract in roughly a month, which is four days faster than last year and a remarkable 17 days faster than March 2016.”
First-time buyers represented 30% of sales in March, up from 29% the previous montt but down from 32% a year ago.
All-cash sales were 20% of transactions in March, down from 24% in February and 23% a year ago. Individual investors, who account for many cash sales, purchased 15% of homes in March, unchanged from February and down from 18% a year ago.
Distressed sales – foreclosures and short sales – were 4% of sales in March, unchanged from February and down from 6% a year ago.
About 3% sales were foreclosures and 1% were short sales.