Existing home sales dip a modest 2.4% in March
Home sales fell only slightly between February and March, but the year-over-year picture illustrates a more significant drop.
- There were 4.4 million sales of existing homes last month, the National Association of Realtors reported.
- High mortgage rates and low inventory remain major hurdles for many buyers.
- Despite the month-over-month stagnation, many buyers are still facing a competitive market.
Despite the turbulent economic conditions — including stubbornly high inflation and mass layoffs in the real estate, tech and media industries — the National Association of Realtors' latest report on existing home sales indicates little change in month-over-month sales.
According to NAR, home sales dipped a modest 2.4% in March. However, the difference in year-over-year sales is much more pronounced, dropping from 5.69 million sales in March 2022 to 4.44 million last month, representing a decline of 22%.
The median existing-home price for all housing types also dipped ever so slightly in March, dropping just 0.9% to $375,700. However, homes are still moving fairly quickly; the typical time for a home to sell was 29 days, according to the report. First-time buyers represented 28% of March sales, while individual investors — or second home buyers — accounted for 17% of March closings.
Mortgage interest rates remain a major culprit, NAR Chief Economist Lawrence Yun suggested in the announcement, causing buyers to compete over the most coveted homes.
"Home sales are trying to recover and are highly sensitive to changes in mortgage rates," Yun said. "Yet, at the same time, multiple offers on starter homes are quite common, implying more supply is needed to fully satisfy demand. It's a unique housing market."
But regions with more elevated home prices are finally starting to see some softening.
"Home prices continue to rise in regions where jobs are being added and housing is relatively affordable," Yun added. "However, the more expensive areas of the country are adjusting to lower prices."
Other housing market economists also weighed in on the data.
"Despite slowing for the month, the 4.44 million pace of home sales remains convincingly above the recent 4 million sales low reached in January, just 2 months after mortgage rates registered above 7%," said Realtor.com Chief Economist Danielle Hale.
Hale also cautions against being too optimistic about a flood of inventory in the coming weeks.
"A recent survey showed that 82% of potential sellers needing to sell and buy felt 'locked in' by their existing low mortgage rate," she said. "Fortunately for buyers, as the number of sellers putting their homes on the market after this week climbs, competitiveness tends to ebb. Unfortunately for buyers, recent weekly data suggests that this year's seasonal surge in new listings may be more muted."
And despite the numbers hinting at a sluggish spring market, buyers are still very much struggling to get homes under contract, said Bright MLS Chief Economist Dr. Lisa Sturtevant.
"On an individual level, most buyers are still finding the housing market very competitive, and they are having a hard time reconciling the news about a slower housing market with their experience trying to buy a home," she said. "The housing market remains in a period of transition, but don't tell homebuyers the market is cool. To buyers in many markets, it still feels red hot."