Existing home sales saw their highest pace in over a decade recently. With inventory levels still being severely low, homes are lasting less time on the market according to a recent report from the National Association of Realtors.
Total existing home sales, being completed transactions of residential properties, increased by 4.4% in March which was 5.9% above numbers seen a year ago. This officially surpasses January as the best month of sales since February of 2007.
Chief economist for NAR, Lawrence Yun, states that the significant gains were driven mostly by the Northeast and Midwest.
“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,” he 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. Sales will go up as long as inventory does.”
Housing stock by the end of March had increased slightly, but was yet 6.6% lower lower than a year ago. Inventory now has been on the decline for 22 months year over year. Inventory for unsold properties is at a 3.8 month supply at the current pace.
Yun also added,
“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.”
Properties were on the market for typically for 34 days for the month of March. This was down from 45 days in February and also from a year ago at 47. Forty eight percent of the homes that sold in March were on the market for less than one month.
Rising prices are a challenge for all, but perhaps even more so for first time buyers. Despite this, Yun adds, “A growing pool of all types of buyers is competing for the lackluster amount of existing homes on the market. 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.”
Meanwhile mortgage rates have been slightly rising with the average commitment rate for a 30 year conventional fixed rate coming in at 4.2%. Buyer profiles consisted of 32% of sales for March being made up of first time buyers.
This spring, the best advice for home buyers is to remain patient and to remember the right home will eventually become available.
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