Following February's almost unprecedented 11.8% surge in existing home sales, March was expected to see a contraction of 3.8% MoM, but fell more and February was revised weaker.
Sales decreased for a fourth time in five months despite lower mortgage rates, sustained wage gains and slower home price appreciation. February's 11.8% spike was revised slightly lower to 11.2% MoM, but March's existing home sales slumped 4.9% MoM (notably worse than the 3.8% drop expected).
Home purchases fell in all four regions, led by a 7.9 percent drop in the Midwest.
Lawrence Yun, NAR’s chief economist, anticipated waning in the numbers for March.
“It is not surprising to see a retreat after a powerful surge in sales in the prior month. Still, current sales activity is underperforming in relation to the strength in the jobs markets. The impact of lower mortgage rates has not yet been fully realized.”
This is the 13th straight month of annual existing home sales declines...
As the median home price rose 3.8% from last year to $259,400, and inventory rose 3.1% to 1.68m homes.
“There’s a supply-demand mismatch,” Jessica Lautz, NAR’s vice president of demographics and behavioral insights, said at a briefing in Washington.
“More inventory is needed at the lower end and a price reduction may be needed at the upper end,” she said, adding that NAR projects sales to accelerate later this year.
The report adds to signs of a cooling market in March, including a government report Friday showing housing starts fell to the slowest pace since May 2017.