A recent report shared by the National Association of Realtors has shown that home prices have continued to rise. Specifically, existing home prices for all housing types including single families, condos, townhomes and coops have increased by 3.8% this March. This is reportedly the 85th month in a row for continued price increases.
Sales for the month of March were slightly down from February, but this is in large part due to the significant increase from January to February.
Lawrence Yun, NAR’s chief economist, anticipated waning in the numbers for March. “It is not surprising to see a retreat after a powerful surge in sales in the prior month. Still, current sales activity is underperforming in relation to the strength in the jobs markets. The impact of lower mortgage rates has not yet been fully realized.”
Inventory levels were on the rise as of the end of March showing a 2.4% increase over March of last year. Available homes for sale was at a 3.9 month supply at the current pace which is up from both February as well as March of last year.
“Further increases in inventory are highly desirable to keep home prices in check,” says Yun. “The sustained steady gains in home sales can occur when home price appreciation grows at roughly the same pace as wage growth.”
In terms of days on market, properties had remained on the market for an average of 36 days for the month of March which was down from 44 in February yet down from 30 days last year at this same time. Approximately 47% of the homes sold in March were on the market for less than one month.
Breaking down the market it appears as the lower end of the market is still the hotter segment. Yun had speculated that tax policy changes could have played a role in the activity of the higher end of the market due to limits on tax deductions.
Finally, interest rates still remain historically low with the commitments decreasing to an average of 4.27% in March for a 30 year fixed mortgage.