March 2016 existing home sales rose 1.5 percent year-over-year on a seasonally adjusted annualized rate (SAAR) of 5.33 million, which was also up 5.1 percent sequentially from February per the National Association of Realtors® (NAR). The median price of $222,700 (for all property types) in March 2016 was up 5.7 percent versus March 2015.
From an actual sales numbers position (not seasonally adjusted), existing home sales in the first quarter of 2016 were up 5.6 percent versus a year earlier. The monthly sales comparison is shown in the following bar chart featuring sales by month for 2014, 2015 and the first three months of 2016.
Median prices continue to rise on a year-over-year basis as shown in the following graph. Median prices are not seasonally adjusted but as you can see, do have a pronounced seasonal pattern. Averaging the monthly medians shows a 6.28 percent increase in median price in the first quarter of 2016 compared to a year earlier.
Driving median price increases is not just demand alone (realizing that the U.S. has created 2.802 million net new jobs in the past 12 months), but also a limited supply of homes available for sale. There was an estimated 4.8 months inventory of homes available for sale in March 2016 on a seasonally adjusted basis, with 6.0 months considered normal. The number of months inventory since 2009 is shown in the following graph.
Other details from the March 2016 NAR release include:
- First-time homebuyers made up 30 percent of all homebuyers, unchanged from a year ago
- One-in-four sales (25 percent) were all-cash transactions with no mortgage loan involved versus 24 percent a year ago
- Investors accounted for 14 percent of all transactions in March, down from 18 percent in February 2016, but unchanged from a year ago. Investors paid all-cash in two-out-of every-three transactions (66 percent of the time)
- Distressed sales made up just 8 percent of all sales, with foreclosures representing 7 percent and short sales 1 percent. Foreclosures sales sold at an average 16 percent discount in price when compared to non-distressed properties while short sales were discounted 10 percent
- Short sales in March 2016 were on the market a median 120 days, foreclosures 50 days and non-distressed properties 46 days
- All properties combined were on the market 47 days in March 2016, down from 52 days a year ago and 59 days in March 2015
- Four-out-of 10 (42 percent) of the homes sold in March 2016 were on the market less than one month
To read the entire NAR March 2016 release click http://www.realtor.org/news-releases/2016/04/existing-home-sales-spring-ahead-in-march
Good job growth, extremely low interest rates, rising rents (in most markets) and limited inventory portend continued increasing home sales and prices.