Rapid Reaction: March Existing Home Sales

• March existing home sales rose 4.4 percent from February and 5.9 percent from a year ago, to 5.71 million units (SAAR), according to the National Association of Realtors. March was the strongest month for existing home sales in more than a decade (February 2007).
• Inventory of homes for sale rose 1.9 percent from February but remained down 6.7 percent from a year ago. Homes sold in March stayed on the market for just 34 days.
• Sales increased in every region except the West, and the non-seasonally adjusted price of existing homes sold in March rose 6.7 percent year-over year to $243,400.

March generally marks the “official” start of the spring home shopping season, and 2017’s started with a bang. The market shook off February’s small dip and buyers came out in droves in March, either unfazed by rising prices and tight inventory or simply determined to overcome any and all obstacles. Early signs from this spring season point to an incredibly competitive market, with inventory once again down substantially from a year ago — especially inventory of single-family homes — and homes typically spending a mere 34 days on market before selling. A strong annual increase in existing home prices suggests that lower-priced, entry-level homes of the kind likely to be sought by first-time buyers are increasingly scarce, with those that do come up for sale attracting intense competition. Existing home sales have beat consensus expectations in five of the past seven months, and at this point the market’s strength shouldn’t be a surprise. Demand is high, inventory is low, prices are rising and competition is fierce — the same trends that have been driving the market for at least the past year, and will continue to do so throughout the remainder of this spring shopping season.