Existing-homes sales surged to their highest annual rate in 18 months, showing a promising beginning to the spring homebuying season, the latest report from the National Association of Relators said.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, jumped 6.1% to a seasonally adjusted annual rate of 5.19 million in March from 4.89 million in February—the highest annual rate since September 2013 (also 5.19 million).
This is positive news for the industry after existing-home sales collapsed 4.9% in January to the lowest rate in nine months, falling well below analyst expectations. And while they did pick up in February and edged up by 1.2%, there was still some stagnation in the market.
Lawrence Yun, NAR chief economist, says the housing market appears to be off to an encouraging start this spring.
"After a quiet start to the year, sales activity picked up greatly throughout the country in March," he continued. "The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years."
Furthermore, sales have increased year-over-year for six consecutive months and are now 10.4% above a year ago, the highest annual increase since August 2013 (10.7%). March's sales increase was the largest monthly increase since December 2010 (6.2%).
Total housing inventory at the end of March grew 5.3% to 2 million existing homes available for sale, and is now 2% above a year ago (1.96 million). Unsold inventory is at a 4.6-month supply at the current sales pace, down from 4.7 months in February.
The median existing-home price for all housing types in March was $212,100, which is 7.8% above March 2014, marking the 37th consecutive month of year-over-year price gains and the largest since February 2014 (8.8%).
"The modest rise in housing supply at the end of the month despite the strong growth in sales is a welcoming sign," adds Yun. "For sales to build upon their current pace, homeowners will increasingly need to be confident in their ability to sell their home while having enough time and choices to upgrade or downsize. More listings and new home construction are still needed to tame price growth and provide more opportunity for first-time buyers to enter the market."
The percent share of first-time buyers was 30% in March. This marks the third time since last March that the first-time buyer share was at or above 30%. First-time buyers represented 29% of all buyers last month; they were 30% in March 2014.
“The jump in March’s existing sales beat expectations and is welcome news for those who have been waiting for the spring housing market to kick into gear,” said Quicken Loans Vice President Bill Banfield. “Purchase applications have been steadily increasing over the last month and rates remain low (for now) – both of which could be signals of continued momentum in the coming months.”
Regionally, existing-home sales in the Northeast increased 6.9% to an annual rate of 620,000, and are 1.6% above a year ago. The median price in the Northeast was $240,500, which is 1.6% below a year ago.
In the Midwest, existing-home sales escalated 10.1% to an annual rate of 1.20 million in March, and are now 12.1% above March 2014. The median price in the Midwest was $163,600, up 9.7% from a year ago.
Existing-home sales in the South climbed 3.8% to an annual rate of 2.19 million in March, and are now 11.7% above March 2014. The median price in the South was $187,900, up 9.3% from a year ago.
Existing-home sales in the West rose 6.3% to an annual rate of 1.18 million in March, and are now 11.3% above a year ago. The median price in the West was $305,000, which is 8.3% above March 2014.