This spring’s housing mantra: Going, going, gone! “Severe” housing shortages are prompting existing homes to sell significantly faster this year, propelling home sales to the highest pace in more than a decade, the National Association of REALTORS® reported Friday.
Strong sales gains in the Northeast and Midwest were behind most of the nationwide 4.4 percent month-over-month increase in existing-home sales in March. The West was the only major region of the U.S. to see a modest decline in sales activity last month.
“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,” says Lawrence Yun, NAR’s chief economist. “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.”
Total existing-home sales—which include completed transactions for single-family homes, townhomes, condos, and co-ops—reached a seasonally adjusted annual rate of 5.71 million in March. The sales pace is 5.9 percent above a year ago. Further, existing-home sales are now the strongest month of sales since February 2007 (5.79 million).
Here’s a closer look at some of the key indicators from NAR’s latest housing report, reflecting March housing numbers:
Home prices: The median existing-home price for all housing types was $236,400, up 6.8 percent from a year ago when it averaged $221,400.
Days on the market: Properties stayed on the market for an average of 34 days in March, down significantly from 47 days a year ago. Short sales took the longest to sell at a median of 90 days in March; foreclosures sold in 52 days; and non-distressed homes took a median of 32 days—which is the shortest length of time since NAR began tracking such data in May 2011. Forty-eight percent of homes sold in March were on the market for less than a month.
All-cash sales: All-cash transactions comprised 23 percent of sales in March, down from 25 percent a year ago. Individual investors make up the biggest bulk of cash sales. They purchased 15 percent of homes in March, up from 14 percent a year ago.
Distressed sales: Foreclosures and short sales made up 6 percent of existing-home sales in March, down from 8 percent a year ago. Broken out, 5 percent of sales in March were foreclosures and 1 percent were short sales. On average, foreclosures sold for a discount of 16 percent below market value; short sales were discounted an average of 14 percent.
Inventories: Housing inventory at the end of March rose 5.8 percent to 1.83 million existing homes available for sale. Inventory is 6.6 percent lower than a year ago (1.96 million). Unsold inventory is now at a 3.8-month supply at the current sales pace.
“Bolstered by strong consumer confidence and underlying demand, home sales are up convincingly from a year ago nationally and in all four major regions despite the fact that buying a home has gotten more expensive over the past year,” Yun says.