This sales figure is based on the results of contracts signed in January and February. Mortgage rates were low in January, in the mid-6%-range on the popular 30-year fixed loan. Then they fired more in February.
Regionally, sales fell everywhere except the Northeast, where they rose 4.2% month-on-month. Sales fell sharply in the West, down 8.2%. Prices are higher in the West.
“Although the cycle has recovered from lows, home sales have been stuck as interest rates have not made any significant moves,” Lawrence Yun, chief economist at NAR, said in a release. “There are now nearly six million jobs compared to the pre-COVID peak, which suggests there are more interested homebuyers in the market.”
Inventories improved slightly, rising 4.7% to 1.11 million homes for sale at the end of March. That's a 3.2-month supply at the current sales pace. Inventory is currently 14.4% higher than March last year.
However, excess supply has not cooled home prices. The median price of an existing home sold in March was $393,500, up 4.8% from a year earlier. This is the highest price for the month of March. However, the annual comparison was slightly lower than the previous month.
The spring housing market is becoming more competitive and moving faster. The typical home sat on the market for just 33 days, compared to 38 days in February.
Investors pulled back slightly, selling 15%, compared with 21% in February and 17% in March last year. First-time buyers accounted for 32% of sales, up from 26% in February and 28% a year earlier.
All-cash purchases accounted for 28% of sales, up from 33% in February, but down from 27% a year ago. Before the pandemic, that share was typically around 20%.
Mortgage rates have moved even higher this month, with the 30-year fixed average rate hovering around 7.5%, according to Mortgage News Daily.
“Every time you get to that round number, it's always a psychological hurdle,” Yun said.
