March 2018 Existing Home Sales Down 1.2 Percent Vs a Year Ago — Median Price Up 5.8 Percent to $250,400 Driven By Minimal Inventory and Strong Demand

Existing home sales came in at  5.60 million dwelling units on a seasonally adjusted annualized rate (SAAR) in March 2018, down 1.2 percent versus a year ago but up 1.1 percent sequentially compared to February 2018, according to the National Association of Realtors® (NAR).   On a raw unadjusted basis, sales totaled 434,000 in March 2018 compared to 455,000 a year ago, a drop of 4.6 percent.

Median price of $250,400 (not seasonally adjusted), was  a 5.8 percent gain year-over-year.  Median prices have now increased for 73 consecutive months on a year-over-year basis driven by demand outpacing supply.   The estimated 3.6 month inventory of homes available for sale (where 6.0 months is assumed as normal) still makes most of the country a seller’s market.  This is down from 3.8 months a year ago.  The number of listings available for sale at the end of March 2018 was down 7.2 percent from a year ago.

The following graph shows the monthly median price and the total number of home sales in the prior 12 months commencing January 2014.

The next graph shows the monthly raw data (not seasonally adjusted) for each month commencing January 2014.  Following that are median prices for the same time period.  Supply continues to trail demand, resulting in rising home prices.

The last graph shows average home prices (not seasonally adjusted), which peaked at an all-time record $303,500 in June of 2017.   The decline since then is all due to the natural seasonal effect.  Average price of $290,100 was up 4.1 percent compared to a year ago.

Other metrics and insights from the NAR release included:

  • 1st-time homebuyers made up 30 percent of closed sales in March, down from 32 percent a year ago
  • All-cash was paid in one-out-of-every-five homes (20 percent) purchased in March 2018, down from 23 percent level a year ago
  • Investors bought 15 percent of all March sales, down from 23 percent  a year ago
  • Typical time on the market was 30 days in March 2018  versus 34 days a year ago.  One-half of all homes sold in March 2018 (50 percent) were on the market less than one month
  • Distressed sales made up just four out of every 100 transactions in the month (down from six out of 100 a year ago), with three being foreclosures just one out of every 100 a short sales
  • On an unadjusted raw basis for the first three months of 2018 compared to a year earlier:

Total sales were down 2.1 percent

Single Family sales were off 1.8 percent

Townhouse-Condo Sales dropped 4.8 percent

To read the entire NAR press release and to access the underlying data series click https://www.nar.realtor/newsroom/existing-home-sales-climb-11-percent-in-march

Tight inventory is no doubt constricting potential sales today.  All considered, however, rising prices and rising interest rates should place a sense of urgency on prospective homebuyers in the market today.

Ted

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