Existing-home sales slide in March

Existing-home sales fell for a second straight month, the National Association of Realtors reported this morning.

Total existing-home sales declined 2.7% from February to a seasonally adjusted annual rate of 5.77 million in March. Year-over-year, sales fell 4.5% (6.04 million in March 2021).

Sales include completed transactions that include single-family homes, townhomes, condominiums, and co-ops.

Single-family home sales decreased to a seasonally adjusted annual rate of 5.13 million in March, down 2.7% from 5.27 million in February and down 3.8% from one year ago. 

“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.”

The median existing single-family home price was $382,000 in March, up 15.2% from March 2021.

The median existing-home price for all housing types in March was $375,300, up 15% from March 2021 ($326,300), as prices rose in each region. This marks 121 consecutive months of year-over-year increases, the longest-running streak on record.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 640,000 units in March, down 3% from 660,000 in February and down 9.9% from one year ago. The median existing condo price was $322,000 in March, an annual increase of 11.9%.

Yun said he predicts transactions to contract by 10% this year, for home prices to readjust, and for gains to grow around 5%.

Total housing inventory at the end of March totaled 950,000 units, up 11.8% from February and down 9.5% from one year ago (1.05 million). 

Unsold inventory sits at a 2-month supply at the present sales pace, up from 1.7 months in February and down from 2.1 months in March 2021.

“Home prices have consistently moved upward as supply remains tight,” Yun said. “However, sellers should not expect the easy-profit gains and should look for multiple offers to fade as demand continues to subside.”

Properties typically remained on the market for 17 days in March, down from 18 days in February and 18 days in March 2021. Eighty-seven percent of homes sold in March 2022 were on the market for less than a month.

All-cash sales accounted for 28% of transactions in March, up from 25% of sales in February and 23% in March 2021.

“With rising mortgage rates, cash sales made up a larger fraction of transactions, climbing to the highest share since 2014,” Yun said.

Here’s how existing-home sales performed by region:

• Existing-home sales in the Northeast slid 2.9% in March, recording an annual rate of 670,000, an 11.8% fall from March 2021. The median price in the Northeast was $390,200, up 6.8% from one year ago.
• Existing-home sales in the Midwest declined 4.5% from the prior month to an annual rate of 1,270,000 in March, a 3.1% drop from March 2021. The median price in the Midwest was $271,000, a 10.4% jump from March 2021.
• Existing-home sales in the South dipped 3% in March from the prior month, registering an annual rate of 2,620,000, a decrease of 3% from one year ago. The median price in the South was $339,000, a 21.2% surge from one year prior. For the seventh straight month, the South experienced the highest pace of price appreciation in comparison to the other three regions.
• Existing-home sales in the West held steady compared to the previous month, posting an annual rate of 1,210,000 in March, down 4.7% from one year ago. The median price in the West was $519,900, up 5.4% from March 2021.