Existing-home sales dipped in March as home buyers continue to change course based on movement in mortgage rates, contributing to a slow start to the spring homebuying season, according to the National Association of REALTORS®’ latest housing report. However, home prices also eased slightly last month, bringing more budget-conscious first-time buyers to the market.
Existing-home sales, including completed transactions for single-family homes, townhomes, condos and co-ops, dropped 2.4% month over month in March. Home sales are down 22% compared to a year ago, NAR data shows. “Home sales are trying to recover and are highly sensitive to changes in mortgage rates,” says NAR Chief Economist Lawrence Yun. The 30-year fixed-rate mortgage averaged in the mid-6% range for most of March, but that’s up from 4% averages a year earlier.
However, home buyers haven’t vanished. “Multiple offers on starter homes are quite common, implying more supply is needed to fully satisfy demand,” Yun adds. “It’s a unique housing market.”
Home prices declined 0.9% year over year in March, lending more opportunities for first-time buyers who have struggled with affordability. First-time home buyers comprised 28% of sales in March, up slightly from 27% in February, NAR reports.
Here are more key indicators from March home sales, according to NAR’s latest report.
- Home prices: The median sales price for an existing home among all housing types was $375,700, down from $379,300 a year ago. Still, prices climbed in three major regions of the U.S. last month: the Midwest, Northeast and South. Prices fell in the West. “Home prices continue to rise in regions where jobs are being added and housing is relatively affordable,” Yun says. “However, the more expensive areas of the country are adjusting to lower prices.”
- Days on the market: Properties typically remained on the market for 29 days, down from 34 days in February. But homes are lingering on the market longer than they did a year ago, when days on market averaged a brisk 17 days. Nonetheless, 65% of homes sold last month were on the market for less than a month.
- Inventory levels: The number of homes for sale remains historically low nationwide, but has ticked up slightly compared to last year’s ultra-low levels. Total housing inventory in March was up 1% compared to February and up 5.4% compared to a year earlier. But unsold inventory remains at a competitive level: a 2.6-month supply at the current sales pace.
- All-cash sales: All-cash sales comprised 27% of transactions in March, down slightly from 28% a year earlier. Individual investors and second-home buyers tend to make up the biggest bulk of cash sales, and they accounted for 17% of transactions in March, down from 18% a year earlier.
- Distressed sales: Foreclosures and short sales represented 1% of sales in March, continuing to match the historically low levels from last month and a year ago.
Here’s a closer look at how home sales fared across the country in March, according to NAR’s latest report.
- Northeast: Existing-home sales were unchanged compared to February, settling at an annual rate of 520,000. But that is down 21.2% from a year earlier. Median price: $395,400, up 1% from one year ago.
- Midwest: Sales fell 5.5% compared to February and are at an annual rate of 1.03 million. That is down 17.6% from the previous year. Median price: $273,400, up 1.7% from a year ago.
- South: Home sales dropped 1% in March compared to February and were at an annual rate of 2.07 million. Sales are down 20.4% compared to a year ago. Median price: $347,600, an increase of 0.3% from one year ago.
- West: Sales dropped 3.5% from February to an annual rate of 820,000. Sales are down 30.5% compared to a year ago. Median price: $565,400, down 7.5% from March 2022.