WASHINGTON – RealEstateRama – Existing-home sales decreased in March, marking two consecutive months of declines, according to the National Association of Realtors®. Month-over-month, sales in March waned in three of the four major U.S. regions while holding steady in the West. Sales were down across each region year-over-year.
Total existing-home sales,1 https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, dipped 2.7% from February to a seasonally adjusted annual rate of 5.77 million in March. Year-over-year, sales fell 4.5% (6.04 million in March 2021).
“The housing market is starting to feel the impact of sharply rising mortgage rates and higher inflation taking a hit on purchasing power,” said Lawrence Yun, NAR’s chief economist. “Still, homes are selling rapidly, and home price gains remain in the double-digits.”
With mortgage rates expected to rise further, Yun predicts transactions to contract by 10% this year, for home prices to readjust, and for gains to grow around 5%.
Total housing inventory2 at the end of March totaled 950,000 units, up 11.8% from February and down 9.5% from one year ago (1.05 million). Unsold inventory sits at a 2.0-month supply at the present sales pace, up from 1.7 months in February and down from 2.1 months in March 2021.
The median existing-home price3 for all housing types in March was $375,300, up 15.0% from March 2021 ($326,300), as prices rose in each region. This marks 121 consecutive months of year-over-year increases, the longest-running streak on record.
“Home prices have consistently moved upward as supply remains tight,” Yun said. “However, sellers should not expect the easy-profit gains and should look for multiple offers to fade as demand continues to subside.”
Properties typically remained on the market for 17 days in March, down from 18 days in February and 18 days in March 2021. Eighty-seven percent of homes sold in March 2022 were on the market for less than a month.
First-time buyers were responsible for 30% of sales in March, up from 29% in February and down from 32% in March 2021. NAR’s 2021 Profile of Home Buyers and Sellers – released in late 20214 – reported that the annual share of first-time buyers was 34%.
“It appears first-time homebuyers are still looking to lock in at current mortgage rates before they inevitably increase,” Yun said.
Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in March, down from 19% in February but up from 15% in March 2021. All-cash sales accounted for 28% of transactions in March, up from both the 25% recorded in February and from 23% in March 2021.
“With rising mortgage rates, cash sales made up a larger fraction of transactions, climbing to the highest share since 2014,” Yun said.
Distressed sales5 – foreclosures and short sales – represented less than 1% of sales in March, equal to the percentage seen in both February 2022 and March 2021.
According to Freddie Mac, the average commitment rate(link is external) for a 30-year, conventional, fixed-rate mortgage was 4.17% in March, up from 3.76% in February. The average commitment rate across all of 2021 was 2.96%.
Realtor.com®’s Market Trends Report(link is external) in March shows that the greatest year-over-year median list price growth occurred in Miami (+37.0%), Las Vegas (+35.2%), and Tampa (+32.0%). Austin posted the highest growth in the share of homes which had their prices reduced compared to last year (+2.9 percentage points), followed by Sacramento and Memphis (+2.3 percentage points).
Single-family and Condo/Co-op Sales
Single-family home sales decreased to a seasonally adjusted annual rate of 5.13 million in March, down 2.7% from 5.27 million in February and down 3.8% from one year ago. The median existing single-family home price was $382,000 in March, up 15.2% from March 2021.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 640,000 units in March, down 3.0% from 660,000 in February and down 9.9% from one year ago. The median existing condo price was $322,000 in March, an annual increase of 11.9%.
“Finding the right home in this market – from making an offer to eventually buying – is an intense process,” said NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “The current state of housing is indeed one of the most competitive markets that I have witnessed, but with patience and the assistance of a trusted Realtor®, the outcome can be very rewarding.”
Existing-home sales in the Northeast slid 2.9% in March, recording an annual rate of 670,000, an 11.8% fall from March 2021. The median price in the Northeast was $390,200, up 6.8% from one year ago.
Existing-home sales in the Midwest declined 4.5% from the prior month to an annual rate of 1,270,000 in March, a 3.1% drop from March 2021. The median price in the Midwest was $271,000, a 10.4% jump from March 2021.
Existing-home sales in the South dipped 3.0% in March from the prior month, registering an annual rate of 2,620,000, a decrease of 3.0% from one year ago. The median price in the South was $339,000, a 21.2% surge from one year prior. For the seventh straight month, the South experienced the highest pace of price appreciation in comparison to the other three regions.
Existing-home sales in the West held steady compared to the previous month, posting an annual rate of 1,210,000 in March, down 4.7% from one year ago. The median price in the West was $519,900, up 5.4% from March 2021.
The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.
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For local information, please contact the local association of Realtors® for data from local multiple listing services (MLS). Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.
NOTE: NAR’s Pending Home Sales Index for March is scheduled for release on April 27, and Existing-Home Sales for March will be released on May 19; release times are 10:00 a.m. ET.
1 Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR benchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.
Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.
The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.
2 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90% of transactions and condos were measured only on a quarterly basis).
3 The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.
The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.
4 Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.
5 Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at nar.realtor.
Media Contact: Quintin Simmons 202-383-1178