After failing to comfortably beat expectations for the last 7 months, March Existing Home Sales surged 6.1% to a 5.19mm SAAR - the highest since Sept 2013. Despite collapsing macro data throughout March all blamed on 'the weather' The Midwest saw existing home sales rise the most (by 10.1%). All this 'pent-up demand' has crushed affordability as home prices are up 7.8% YoY - the largest gain since Feb 2014.
Existing Home Sales spiked:
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Homebuilders remain in a world of hope:
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The detailed breakdown:
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As NAR's Larry Yun explains, it's all the demand on the sidelines.
Lawrence Yun, NAR chief economist, says the housing market appears to be off to an encouraging start this spring. "After a quiet start to the year, sales activity picked up greatly throughout the country in March," he said. "The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years."
Detail on inventory and pricing:
Total housing inventory2 at the end of March climbed 5.3 percent to 2.00 million existing homes available for sale, and is now 2.0 percent above a year ago (1.96 million). Unsold inventory is at a 4.6-month supply at the current sales pace, down from 4.7 months in February.
The median existing-home price3 for all housing types in March was $212,100, which is 7.8 percent above March 2014. This marks the 37th consecutive month of year-over-year price gains and the largest since February 2014 (8.8 percent).
Properties typically stayed on the market for a shorter time period in March (52 days) compared to February (62 days), and are also selling slightly faster than a year ago (55 days). Short sales were on the market the longest at a median of 165 days in March, while foreclosures sold in 56 days and non-distressed homes took 51 days. Forty percent of homes sold in March were on the market for less than a month.
"The modest rise in housing supply at the end of the month despite the strong growth in sales is a welcoming sign," adds Yun. "For sales to build upon their current pace, homeowners will increasingly need to be confident in their ability to sell their home while having enough time and choices to upgrade or downsize. More listings and new home construction are still needed to tame price growth and provide more opportunity for first-time buyers to enter the market."
Breakdown on all-cash deals:
All-cash sales were 24 percent of transactions in March, down from 26 percent in February and down considerably from a year ago (33 percent). Individual investors, who account for many cash sales, purchased 14 percent of homes in March, unchanged from last month and down from 17 percent in March 2014. Seventy percent of investors paid cash in March.
Distressed sales—foreclosures and short sales—were 10 percent of sales in March, down from 11 percent in February and 14 percent a year ago. Seven percent of March sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in March (17 percent in February), while short sales were also discounted 16 percent (15 percent in February).
Most importantly, there is no acceleration in rotation out of renting and into owning. First time buyers were 30% a year ago, they are 30% now:
"The percent share of first-time buyers was 30 percent in March, marking the third time since last March that the first-time buyer share was at or above 30 percent. First-time buyers represented 29 percent of all buyers last month; they were 30 percent in March 2014."
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And the regional breakdown:
March existing-home sales in the Northeast increased 6.9 percent to an annual rate of 620,000, and are 1.6 percent above a year ago. The median price in the Northeast was $240,500, which is 1.6 percent below a year ago.
In the Midwest, existing-home sales jumped 10.1 percent to an annual rate of 1.20 million in March, and are now 12.1 percent above March 2014. The median price in the Midwest was $163,600, up 9.7 percent from a year ago.
Existing-home sales in the South climbed 3.8 percent to an annual rate of 2.19 million in March, and are now 11.7 percent above March 2014. The median price in the South was $187,900, up 9.3 percent from a year ago.
Existing-home sales in the West rose 6.3 percent to an annual rate of 1.18 million in March, and are now 11.3 percent above a year ago. The median price in the West was $305,000, which is 8.3 percent above March 2014.
