Home sales dropped by 4% last month and 8% YOY, closing out a fast-paced March with signs of a potential cooldown, Redfin reported.
Homes sold at their fastest pace ever and for more above list price than any other March in history. The median home-sale price rose 6.2% to $412,700, a record high and the fastest month-over-month gain for this time of year since 2013.
But seasonally adjusted home sales fell 4% thanks to severe inventory shortages, rising rates, and accelerating home prices. Seasonally adjusted active listings—the count of all homes that were for sale at any time during the month—fell 13% YOY to an all-time low.
“Although pricey coastal markets began showing early signs of a slowdown in late March, nationwide sales data for the full month reflects the hottest March market on record, since homes that sold last month mostly went under contract in February,” said Redfin chief economist Daryl Fairweather.
“We expect the combination of surging mortgage rates and record-high home prices to cause more homebuyers to drop out of the market. Unfortunately, homeowners are turning their back on the market too. Instead of being motivated to list before prices weaken, potential home sellers may be choosing to wait out the impending market cooldown.”
Consumer sentiment has turned against the housing market in recent months. Fannie Mae’s “Good Time to Buy” component set a new survey low in March with 73% of respondents saying that it’s a bad time to buy a home.
Median sales prices increased the most in Tampa, FL (+29%), Phoenix (+27%), and McAllen, TX (+27%).
The largest sales declines were in North Port, FL (-30%), West Palm Beach, FL (-24%), and Lake County, IL (-21%). The largest gains were in Fresno, CA (+6%), Philadelphia (+6%), and Oxnard, CA (+3%).
“Everyone is watching mortgage rates right now. Buyers using traditional financing are worried about being priced out, but all-cash buyers are rubbing their hands together, thinking that high rates will dry up the competition and they will be able to swoop in and bid unopposed,” said Redfin Austin real estate agent Chris Lefforge.
“However, the biggest effect I’m seeing right now has been on investors. With prices rising so fast, the return on investment is falling fast. Higher monthly payments are starting to push Austin-area investors into other less expensive markets or out of the market altogether.”
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