Existing Home Sales Receded in March

2025-04-24T12:16:51-05:00

Existing home sales declined in March, according to the National Association of Realtors (NAR), as affordability challenges continued to weigh on the market. For the first time, the median home price surpassed $400,000 for the month of March, underscoring the ongoing pressure on prospective buyers. While mortgage rates have eased slightly, persistent economic uncertainty may continue to limit buyer activity in the near term. While existing home inventory improves and the Fed continues lowering rates, the market faces headwinds as mortgage rates are expected to stay above 6% for longer due to an anticipated slower easing pace in 2025. These prolonged rates may continue to discourage homeowners from trading existing mortgages for new ones with higher rates, keeping supply tight and prices elevated. As such, sales are likely to remain limited in the coming months due to elevated mortgage rates and home prices. Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, declined 5.9% to a seasonally adjusted annual rate of 4.02 million in March. On a year-over-year basis, sales were 2.4% lower than a year ago. The share of first-time buyers rose to 32% in March, up from 31% in February and unchanged from March 2024. The existing home inventory level was 1.33 million units in March, up 8.1% from February and 19.8% from a year ago. At the current sales rate, March unsold inventory sits at a 4.0-months’ supply, up from 3.5 months in February and 3.2 months in March 2024. This inventory level remains low compared to balanced market conditions (4.5 to 6 months’ supply) and illustrates the long-run need for more home construction. Homes stayed on the market for an average of 36 days in March, down from 42 days in February but up from 33 days in March 2024. The March all-cash sales share was 26% of transactions, down from 32% in February and 28% a year ago. The March median sales price of all existing homes was $403,700, up 2.7% from last year. This marked the 21st consecutive month of year-over-year increases. The median condominium/co-op price in March was up 1.5% from a year ago at $363,000. This rate of price growth will slow as inventory increases. In March, existing home sales declined across all four major U.S. regions. The West experienced the steepest drop, with sales falling 9.4%, followed by the South (-5.7%), the Midwest (-5.0%), and the Northeast (-2.0%). On a year-over-year basis, sales rose slightly in the West by 1.3%, declined in the South and Midwest by 4.2% and 3.1% respectively, and remained unchanged in the Northeast. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell from 70.6 to an all-time low of 67.3 in February. This decline suggests elevated home prices and higher mortgage rates continue to constrain affordability. On a year-over-year basis, pending sales were 9.9% lower than a year ago, per National Association of Realtors data. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Existing Home Sales Receded in March2025-04-24T12:16:51-05:00

Existing Home Sales Increased in February

2025-03-20T13:17:48-05:00

Existing home sales in February increased to the second highest level since March 2024, according to the National Association of Realtors (NAR). This rebound suggests buyers are slowly entering the market as inventory improves and mortgage rates decline from recent high in January. Despite rates easing, economic uncertainty may continue to constrain buyer activity. While existing home inventory improves and the Fed continues lowering rates, the market faces headwinds as mortgage rates are expected to stay above 6% for longer due to an anticipated slower easing pace in 2025. These prolonged rates may continue to discourage homeowners from trading existing mortgages for new ones with higher rates, keeping supply tight and prices elevated. As such, sales are likely to remain limited in the coming months due to elevated mortgage rates and home prices. Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, rose 4.2% to a seasonally adjusted annual rate of 4.26 million in February. On a year-over-year basis, sales were 1.2% lower than a year ago. The first-time buyer share was 31% in February, up from 28% in January and 26% from a year ago. The existing home inventory level was 1.24 million units in February, up from 1.18 million in January, and up 17.0% from a year ago. At the current sales rate, February unsold inventory sits at a 3.5-months’ supply, unchanged from last month but up from 3.0-months’ supply a year ago. This inventory level remains low compared to balanced market conditions (4.5 to 6 months’ supply) and illustrates the long-run need for more home construction. Homes stayed on the market for an average of 42 days in February, up from 41 days in January and 38 days in February 2024. The February all-cash sales share was 32% of transactions, up from 29% in January but down from 33% a year ago. All-cash buyers are less affected by changes in interest rates. The February median sales price of all existing homes was $398,400, up 3.8% from last year. This marked the 20th consecutive month of year-over-year increases. The median condominium/co-op price in February was up 3.5% from a year ago at $355,100. This rate of price growth will slow as inventory increases. Existing home sales in February were mixed across the four major regions. Sales rose in the South (4.4%) and West (13.3%), fell in the Northeast (-2.0%), and remained unchanged in the Midwest. On a year-over-year basis, sales increased in the Northeast (4.2%) and Midwest (1.0%), decreased in the South (-4.0%), and were unchanged in the West. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell from 74.0 to an all-time low of 70.6 in January. This decline suggests elevated home prices and higher mortgage rates continue to constrain affordability. On a year-over-year basis, pending sales were 5.2% lower than a year ago, per National Association of Realtors data. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Existing Home Sales Increased in February2025-03-20T13:17:48-05:00

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