The National Association of Realtors® reports Existing-Home Sales Slid 2.4% in March
Key Highlights
- Existing-home sales retreated 2.4% in March to a seasonally adjusted annual rate of 4.44 million. Sales declined 22.0% from one year ago.
- The median existing-home sales price dipped 0.9% from the previous year to $375,700.
- The inventory of unsold existing homes rose 1.0% from the prior month to 980,000 at the end of March, or the equivalent of 2.6 months’ supply at the current monthly sales pace.
- All-cash sales accounted for 27% of transactions in March, down from 28% in February and one year ago.
- First-time buyers were responsible for 28% of sales in March, up from 27% in February but down from 30% in March 2022. NAR’s 2022 Profile of Home Buyers and Sellers – released in November 2022 – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
- Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in March, down from 18% in February and the previous year.
Existing-Home Sales Percent Change From Month Ago
In February, the string of 12 consecutive month-over-month declines ended. The streak of 131 consecutive months of year-over-year increases on the median price has also ended.
Existing Home Sales Supply
For more stats and charts including regional breakdowns, please see the NAR’s Summary of March 2023 Existing Home Sales Statistics
Existing Home Sales Long Term
Transaction Crash
Existing home sales have crashed to a level seen in the mid 1990s. Prices have not crashed but transactions have.
People who want to move are effectively trapped in their houses because they do not want to trade a sub-3% mortgage for a 6.5% mortgage.
The bidding wars we do see are from people who are price insensitive. They make for amusing anecdotes but the above chart shows the real picture.
This crash is likely to last longer because intertest rates are likely to stay higher for longer because the Fed fears stoking more inflation.
Home sales mean appliance sales, new furniture, cabinets, new carpet, landscaping, etc. Who doesn’t spend a lot more money when they move into a new home?
Median Home Prices Sink 3% in March, the Biggest Yearly Drop Since 2012
Yesterday, I noted Median Home Prices Sink 3% in March, the Biggest Yearly Drop Since 2012
But median home prices are not a good measure of price. Repeat sales of the same house is the proper way to view things.
Repeat sales are not timely but they are more accurate.
Case Shiller Home Price Index
Home Prices Are Falling Everywhere, But Not as Fast as They Rose
On April 1, I commented Home Prices Are Falling Everywhere, But Not as Fast as They Rose
Home Price Synopsis
- Home prices have peaked this cycle but the decline is certainly tiny compared to the run up.
- There is big lag in reporting. The latest report is for January and that represents sales primarily made in November and December.
- The declines shown are undoubtedly understated by a lot.
- Declines will accelerate but not fast enough to revive a housing market that has soured dramatically.
Percent Change From Year Ago
Fed Minutes Now Predict a Recession This Year Along With Higher Unemployment
Please note Fed Minutes Now Predict a Recession This Year Along With Higher Unemployment
Also note that 70 Percent of Americans are Financially Stressed, 58 Percent Live Paycheck to Paycheck
The naïve view is that housing cannot crash unless prices crash. The reality is transactions have crashed, and weak home sales portend a weak economy for a long time.
Fed Chair Jerome Powell has admitted as much.
This post originated on MishTalk.Com.
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