Completed sales of existing homes in March fell 3.7 percent from February to an annualized rate of 6.01 million, the second straight month of decline and the slowest since last August, the National Association of Realtors (NAR) reported.
March sales were still 12.3 percent above those of the previous March when the COVID pandemic was freezing people in place.
Demand for homes continues strong; the supply remains the problem, with 28.2 percent fewer on the market now than a year ago.
“Multiple offers are prevalent in today’s market,” Lawrence Yun, NAR’s chief economist said in comments quoted by CNBC, with homes selling an average of 18 days after listing, according to NAR.
With 1.07 million homes for sale on 1 April – typically only a two-month supply-demand pushed March’s median home sale price to a record $329,100, a 17.2-percent year-on-year jump and the fastest appreciation in history, NAR reported.
TREND FORECAST: Housing supply will grow further as builders delay projects. Lumber and other materials are in short supply, sending prices skyward, and many contractors are waiting for supplies to expand and prices to ease before buying again.
After settling at record or near-record rates for months, mortgage interest rates shot up in February, sidelining potential buyers who lacked the stricter income and credit qualifications lenders now require of applicants.
With an economic boom time ahead, we forecast the housing market will continue to rise, but it will contract as interest rates rise higher. And even when the equity markets crash and the housing boom stops, the areas where real estate prices have shot up will not suffer sharp declines.
On the downside, the commercial sector will continue to weaken as more people spend more time working at home and less time commuting.
