Existing home sales soared in March to the highest pace in more than 10 years as homes sold significantly faster than last month and last year, according to the latest report from the National Association of Realtors.
Total existing home sales, completed transactions including single-family homes, townhomes, condominiums and co-ops, increased 4.4% to a seasonally adjusted rate of 5.71 million in March, according to NAR’s report. This is an increase from the downwardly revised 5.47 million in February, and is 5.9% above last year’s pace, marking the strongest month of sales since February 2007.
“The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month,” NAR Chief Economist Lawrence Yun said.
“Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings in March for sales to muster a strong gain,” Yun said. “Sales will go up as long as inventory does.”
The median existing-home price continued to rise, hitting $236,400 in March. This is up 6.8% from last year’s $221,400 and marks the 61st consecutive month of annual home-price increases.
“Bolstered by strong consumer confidence and underlying demand, home sales are up convincingly from a year ago nationally and in all four major regions despite the fact that buying a home has gotten more expensive over the past year,” Yun said.
Inventory increased 5.8% from February to 1.83 million in March, but remains 6.6% below last year’s 1.96 million. This marks the 22nd consecutive month of annual inventory decreases. Unsold inventory now rests at a 3.8-month supply at the current sales pace.
“Last month’s swift price gains and the remarkably short time a home was on the market are directly the result of the homebuilding industry’s struggle to meet the dire need for more new homes,” said Yun.
“A growing pool of all types of buyers is competing for the lackluster amount of existing homes on the market,” he said. “Until we see significant and sustained multi-month increases in housing starts, prices will continue to far outpace incomes and put pressure on those trying to buy.”
However increased competition caused homes to soar off the market as properties typically stayed on the market for 34 days in March, down significantly from 45 days in February and 47 days last year.
Short sales stayed on the market an average of 90 days in March as foreclosures usually sold in about 52 days. Non-distressed homes took the shortest time to sell at 32 days, the shortest time since NAR began tracking in May 2011. In fact, 48% of homes sold in March were on the market for less than a month.