Rapid Reaction: March Existing Home Sales

• March existing home sales rose 1.1 percent from February, to 5.6 million (SAAR), according to the National Association of Realtors. Sales were down 1.2 percent from a year ago.
• The median, seasonally adjusted price of existing homes sold last month rose 0.6 percent from February and 5.8 percent from a year ago, to $257,100, the 73 consecutive month of annual price increases.
• Inventory fell 7.2 percent from a year ago, continuing a roughly three-year long annual slide. But inventory rose month-over-month for the third straight month, the first such three-month stretch since spring 2015.

Despite rising mortgage interest rates, persistently tight inventory and changes to the tax code that blunted some historic advantages of homeownership, demand from home buyers remains undeterred -- great news for a housing market starving for some positives: All the upward momentum recently has been on prices, not quantities. March was the second solid month in a row for existing home sales, and likely would have been better were it not for bad weather that likely kept some shoppers home.  Still, sales in the 5.6 million annual range don't represent much of a change from recent levels, and the market seems to be plateauing lately rather than breaking through, seemingly unable to break free from the gravity of exceptionally tight inventory. It’s hard to sell homes in large numbers when there’s so few available to buy, and that raises the question of whether the market has reached or surpassed its peak sales volume given current conditions. But unlike last decade, when prices began to plummet as sales volumes stagnated and the air was let out of the market, prices today keep rising. This speaks a lot to sound fundamentals of strong demand and a good economy, but it’s not at all clear how long this pattern of lackluster sales volumes but consistently rising prices can realistically be expected to continue.