Existing home sales fell for a second month in March, down 2.7% from February and 4.5% YOY, according to the National Association of Realtors (NAR).
Existing home sales are now down to an annualized rate of 5.77 million. March sales dropped in three of the four major regions but stayed stable in the West. But all four regions saw YOY declines.
“The housing market is starting to feel the impact of sharply rising mortgage rates and higher inflation taking a hit on purchasing power,” said Lawrence Yun, NAR’s chief economist.
“Still, homes are selling rapidly, and home price gains remain in the double-digits.”
Properties remained on the market for an average of 17 days, down from 18 days both in February and the year prior. Eighty-seven percent sold in less than a month.
Yun added that as rates keep rising, sales could decline by 10% in 2022. He also predicted that home price appreciation will slow and that gains will grow by about 5%.
The inventory of unsold existing homes rose to 950,000, up to a 2-month supply at the current sales rate from a 1.7-month supply. This is an 11.8% increase from February, but down 9.5% YOY.
NAR’s count of existing home sales includes single-family homes, townhomes, condos, and co-ops.
The median existing-home price was $375,300, up 15% from the year prior when it was $326,300. This marks 121 consecutive months of YOY increases, the longest-running streak on record.
“Home prices have consistently moved upward as supply remains tight. However, sellers should not expect the easy-profit gains and should look for multiple offers to fade as demand continues to subside,” Yun said.
First-time buyers bought 30% of homes sold, while individual investors or second-home buyers bought 18%. All-cash offers made up 28% of sales, their highest share since 2014.
Many companies have started offering cash-offer services to help buyers compete in a hot housing market.
“Cash offers were traditionally reserved for the few that can afford to make a cash offer,” Tom Willerer, an executive with Opendoor, a company offering this service, told NPR. Now, “you can use our cash to back your offer, and that really democratizes access to cash offers.”