Existing-home sales dipped in March after rising the month prior as the housing market remains rate sensitive.
Sales declined by 2.4% to a seasonally adjusted annual rate of 4.44 million from 4.48 million the month prior, according to the latest data from the National Association of Realtors.
Year-over-year, sales are down 22%.
All four major regions saw sales decline year-over-year and three of the four tanked month-over-month. Only the Northeast’s sales were unchanged from February.
The median price for an existing home slid YOY alongside rates, down 0.9% to $375,700. This is just the second YOY decline in years– last month’s dip broke the longest streak on record, 131 consecutive months of price gains.
“Home sales are trying to recover and are highly sensitive to changes in mortgage rates,” said NAR Chief Economist Lawrence Yun. “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.”
Entry-level inventory has risen just 1% in the last year, compared to 8% for mid-priced and 13% for high-tier homes. Prices for these houses are trending up thanks to hot competition, while prices are falling for more expensive homes.
Despite these headwinds, many potential buyers are house hunting, even if they’re not jumping into a sale.
Redfin’s Homebuyer Demand Index rose 3% from a week prior and 12% from a month earlier during the week ending April 16.
“Homebuyers are window shopping and many are entering the store, but few of them are making it to the cash register yet,” said Redfin Deputy Chief Economist Taylor Marr. “There’s not much on the shelves to choose from, and high mortgage rates and still-high prices are making homes too expensive for many buyers.”
March’s inventory of unsold homes ticked up by 1% from February and 5.4% YOY to 980,000. This is a 2.6-month supply at the current sales pace.
The typical home stayed on the market for 29 days in March, down from 34 in February, while 65% of homes sold were on the market for less than a month.
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