Existing-home sales decreased in March, marking two consecutive months of declines, according to the National Association of Realtors (NAR). Month-over-month, sales in March waned in three of the four major U.S. regions while holding steady in the West. Sales were down across each region year-over-year.
Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, dipped 2.7 percent from February to a seasonally adjusted annual rate of 5.77 million in March. Year-over-year, sales fell 4.5 percent (6.04 million in March 2021).
“The housing market is starting to feel the impact of sharply rising mortgage rates and higher inflation taking a hit on purchasing power,” said Lawrence Yun, NAR’s chief economist. “Still, homes are selling rapidly, and home price gains remain in the double-digits.”
With mortgage rates expected to rise further, Yun predicts transactions to contract by 10 percent this year, for home prices to readjust, and for gains to grow around 5 percent.
The median existing-home price for all housing types in March was $375,300, up 15.0 percent from March 2021 ($326,300), as prices rose in each region. This marks 121 consecutive months of year-over-year increases, the longest-running streak on record.
“Home prices have consistently moved upward as supply remains tight,” Yun said. “However, sellers should not expect the easy-profit gains and should look for multiple offers to fade as demand continues to subside.”
Properties typically remained on the market for 17 days in March, down from 18 days in February and 18 days in March 2021. Eighty-seven percent of homes sold in March 2022 were on the market for less than a month.
First-time buyers were responsible for 30 percent of sales in March, up from 29 percent in February and down from 32 percent in March 2021.
“It appears first-time homebuyers are still looking to lock in at current mortgage rates before they inevitably increase,” Yun said.
Individual investors or second-home buyers, who make up many cash sales, purchased 18 percent of homes in March, down from 19 percent in February but up from 15 percent in March 2021. All-cash sales accounted for 28 percent of transactions in March, up from both the 25 percent recorded in February and from 23 percent in March 2021.
“With rising mortgage rates, cash sales made up a larger fraction of transactions, climbing to the highest share since 2014,” Yun said.
Realtor.com’s Market Trends Report in March shows that the greatest year-over-year median list price growth occurred in Miami (+37.0 percent), Las Vegas (+35.2 percent), and Tampa (+32.0 percent). Austin posted the highest growth in the share of homes which had their prices reduced compared to last year (+2.9 percentage points), followed by Sacramento and Memphis (+2.3 percentage points).
Single-family and Condo/Co-op Sales
Single-family home sales decreased to a seasonally adjusted annual rate of 5.13 million in March, down 2.7 percent from 5.27 million in February and down 3.8 percent from one year ago. The median existing single-family home price was $382,000 in March, up 15.2 percent from March 2021.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 640,000 units in March, down 3.0 percent from 660,000 in February and down 9.9 percent from one year ago. The median existing condo price was $322,000 in March, an annual increase of 11.9 percent.