March existing-home sales spike 4.4% despite inventory woes

March existing-home sales spike 4.4% despite inventory woes

US existing home sales rose more than expected in March, bolstering optimism over the health of the housing market, according to a report released on Friday by the National Association of Realtors (NAR).

Home sales jumped in the Buckeye State and across the nation during March, as buyers - apparently undeterred by rising prices - pounced faster.

The consensus forecast was for a 2.5% rise from February's initial reading to 5.60 million units. The low levels of inventory are exerting upward pressure on prices, with the median price rising 6.8 percent year-on-year, a solid figure in spite of a slight slowdown from the 7.6 percent pace in the prior month.

While the number of homes on the market rose 5.8% to 1.83 million units last month, housing inventory was down 6.6% from one year ago, implying that demand is outweighing supply. 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. "Sales will go up as long as inventory does".

Buyers closed on purchases of 12,245 homes, at an average price of $163,382 - up 6.2 percent from the same month of previous year.

Twenty-three percent of existing-home sales in March were all-cash, compared to 15 percent by individual investors.

Properties sold in March had typically stayed on the market for 34 days, down significantly from 45 days in February and 47 days a year ago. Foreclosed and nondistressed homes were on the market for an average of 52 and 32 days, respectively, and short sales took a median of 90 days to sell.

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The gains were mostly seen in the single-family segment where transactions increased 4.3 percent to 5.08 million.

"A growing pool of all types of buyers is competing for the lackluster amount of existing homes on the market", he said.

"The sales activity in March is a welcomed start to the traditional home-buying season", Pete Kopf, the association's president, said in a news release.

Existing-home sales in the Northeast posted a strong 10.1 percent gain in March to 760,000, with a median price of $260,800.

In the Midwest, existing-home sales increased 9.2 percent to an annual rate of 1.31 million. "Over the a year ago home sales under $100,000 fell 7.1 percent while sales between $500,000 and $750,000 went up by 32.1 percent, due to builders' focus on the higher-end market".

But severe supply shortages meant the typical home came off the market significantly faster than in February and a year ago.

Since December existing home sales activity in the USA has been very volatile.

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