March existing-home sales fall as expected but year-over-year sales hang on
After a February full of growth, March existing-home sales fell 8.5 percent to a seasonally adjusted annual rate of 5.27 million, though year-over-year sales were still up by 0.8 percent.
“Unfortunately, we knew home sales would wane in March due to the coronavirus outbreak,” said NAR’s chief economist, Lawrence Yun. “More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise.”
Stable home prices, but sliding inventory
Despite the decline in sales, March home prices remain strong, with prices increasing in every region—marking the 97th straight month of year-over-year gains. The median existing-home price for all housing types in March was $280,600—up 8.0% from last year’s $259,700.
At the end of March, total housing inventory was at 1.50 million units, up 2.7 percent from February, but down 10.2 percent from last year, with unsold inventory at a 3.4-month supply.
“Earlier in the year, we watched inventory gradually tick upward but with the current quarantine recommendations in place, fewer sellers are listing homes, which will limit buyer choices,” Yun explains. “Significantly more listings are needed, and more will come onto the market once the economy steadily reopens.”
An industry adapts
Both buyers and agents are doing things a little differently in light of the coronavirus pandemic. Many agents have moved to conducting virtual tours and NAR’s recent “Flash Survey” reported 93 percent of sellers changed behavior to help the homebuying transaction progress while following necessary precautions and practicing social distancing.
“Despite the social distancing restrictions, with many Realtors® conducting virtual open home tours and with mortgage rates on the decline, a number of first-time buyers were still able to purchase housing last month,” said Yun. NAR’s data shows first-time buyers comprised 34 percent of sales in March—up from 32 percent in February and 33 percent from last year.
“It is NAR’s top priority to continue to aid and assist Realtors® during these unpredicted, trying times,” said NAR President Vince Malta. “We have played an instrumental role on Capitol Hill as Congress secured multiple federal relief packages, and we will continue fighting on behalf of our 1.4 million members, American consumers and the nation’s economy as these conversations persist.”
Malta continues, hopeful for the industry’s adaptability, “We have seen an increase in virtual home tours, e-signings and other innovative and secure methods that comply with social distancing directives. I am confident that Realtors® and brokerages will adapt, evolve and fight, ensuring the real estate industry will be at the forefront of our nation’s upcoming economic recovery.”
Sales across the regions
While March sales decreased in every region, both the Midwest and the South saw increases in year-over-year sales.
March existing-home sales:
- Northeast: down 7.1 % to an annual rate of 650,000—down 3.0% from last year
- Midwest: down 3.1% to an annual rate of 1.25 million—up 4.2% from last year
- South: down 9.1.% to an annual rate of 2.29 million—up 0.9% from last year
- West: down 13.6% to an annual rate of 1.08 million—0.9% decline from last year
Median home prices were up across the board in March:
- Northeast: $300,400—up 8.3% from last year
- Midwest: $219,700—up 9.7% from last year
- South: $245,100—up 7.5% from last year
- West: $420,600—up 8.0% from last year