Existing property closed sales declined 3.7% in March to a seasonally adjusted annual rate of 6.01 million units, according to the National Association of Realtors.
This is the slowest selling rate since August and the second straight month of declines.
Still, sales were up 12.3% on March 2020 when transactions declined due to the Covid pandemic.
Brokers say monthly numbers are going down due to limited supply. The demand is there. Homes sell in just 18 days on average, which is considered an extremely fast rate.
“If demand declined, we would see fewer multiple offers, but we know that multiple offers are widespread in today’s marketplace,” said Lawrence Yun, brokers chief economist.
The number of houses for sale fell by 28.2% compared to the previous year. At the end of the month there were only 1.07 million houses for sale, which corresponds to a supply of 2.1 months at the current rate of sale.
The low supply drives prices up further. The average price for an existing home sold in March was $ 329,100, up 17.2% from March 2020. This is the highest price ever and the fastest rate of appreciation.
Part of that gain is due to the fact that there are more homes being sold at the high end of the market, making the median higher. Overall, however, the prices are significantly higher.
“Perhaps the record market will provide the funds to buy these million dollar homes,” Yun said.
These completed sales represent contracts signed in January and February. Mortgage rates started near a record low this year but then rose sharply in February and most of March. As interest rates rose, potential buyers lost purchasing power and some were likely to be incapacitated.
More homes have hit the market in the past few weeks, but the market is still incredibly slim, especially on the lower end. High-end home offerings are more numerous.
“While there are nowhere near enough homes, the housing supply could reach a tipping point once the property market hits the prime time of year to sell a home, thanks to a surge in new listings,” said Danielle Hale, chief economist for real estate agents. com. “In addition, despite the challenges, builders are finding a way to build a growing number of new houses.”
However, builders are still producing well below demand as prices for land, labor and materials are rising. Lumber hit some new highs just this month. Some builders delay projects so they don’t buy materials at the height of the market.