Key Takeaways from the March Existing Home Sales Report

• Existing home sales rebounded strongly in March after a slow start to the year, according to the National Association of Realtors.
• The median price of existing homes sold continues to increase rapidly, outpacing growth in home values overall.

Existing home sales rose 6.1 percent in March from February, to 5.1 million units at a seasonally adjusted annual rate (SAAR) according to the National Association of Realtors (NAR), rebounding strongly after a weak start to the year (figure 1).

Sales in both January and February came in below expectations, but March data suggests that pent-up demand – both from buyers held back by an unusually harsh winter, and from a strengthening economy after years of slow growth – is starting to materialize.

Sales were up 10.4 percent from a year ago, the strongest annual increase since July 2013, when home sales activity was still showing a strong bounce from the bottom of the recession. Despite the strong gains in March, the overall sales level remains below where it was in the summer of 2013, and has been essentially flat (with periodic ups and downs) over the past two years.

The median price of existing homes sold in March increased 0.8 percent from February and 7.8 percent from a year ago, to $219,480. The median home sold in March 2015 was, on average, about $15,000 more expensive than the median existing home sold a year ago, and about $50,000 (30 percent) more expensive than in April 2009, when the sales price of existing homes sold bottomed out after the housing bust. This trough in the median price of existing homes sold occurred almost three years before the trough in overall home values (the median value of all homes, regardless whether they have sold or not). As of March, home values in general are up about $26,000 (17 percent) from their low point in early 2012, according to the Q1 2015 Zillow Real Estate Market Report.

Together, the data suggests that home sales continue to trend toward pricier markets and higher-value homes.