March Existing Home Sales: Dual Headwinds

• 5.77 million existing homes were sold in March (SAAR), down 2.7% from February and down 4.5% from March 2021, according to the National Association of Realtors (NAR).
• Total housing inventory at the end of March amounted to 950,000 units, NAR said, up 11.8% from February and down 9.5% from one year ago.
• The median existing-home price for all housing types in March was $375,300, up 15.0% from March 2021.

With one of the lowest months of inventory on record and worsening affordability, this spring shopping season has been unfavorable for many prospective buyers. Rising home values and the jump in interest rates has meant record-setting increases in mortgage costs. And for those ready to buy, there were fewer home listings available to choose from this early in the season compared to previous years. Despite these conditions, demand is holding strong for the homes making it to market. Homes that went pending did so weeks faster than speeds prior to the pandemic, and the share of listings with price cuts, though higher than this time last year, is also below rates seen prior to 2020. Dual headwinds of low inventory and rising costs will weigh on sales eventually if they persist, and we could see a lower volume of home sales in the months ahead than what some predicted at the start of the year.