March Existing Home Sales

Spring may have sprung in the housing market.  According to the National Association of Realtors, existing homes sales jumped 6.1 percent in March 2015 after increasing just 1.5 percent (upwardly revised from 1.2 percent) in February.  The sharp increase helped push the year-over-year tally to 10.4 percent, a stark increase from 4.7 percent a month earlier.

All four regions of the country logged better numbers in March.  Sales in the South increased 3.9 percent in the period and are 11.7 percent higher than a year ago.   Transactions in the West improved 6.3 percent, and were 11.3 percent higher than March 2014.  Northeast sales posted an increase of 6.9 percent, and are 1.6 percent greater than 12 months ago.  Finally, Midwest transactions jumped 10.1 percent in the period and have tallied an increase of 12.1 percent in the past year.

Prices firmed.  The average existing home in America sold for $257,400 in March, an increase of 3.9 percent over February.   The median measure moved even faster, increasing 7.3 percent to $212,100 from $197,600 a month earlier; the median price improved in three out of the four regions with the Northeast being the only exception.

Interest rates remained helpful to the housing market.  Although it increased for the second consecutive month, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was just 3.77 percent, according to Freddie Mac.  Despite the slight uptick from 3.71 percent in February, the monthly average remained below 4.00 percent for the fourth straight month.

Inventory measures were mixed.  The existing home market added roughly 100,000 units.  However, since the pace of sales improved faster than the increase in homes for sale, the inventory relative to sales decreased; it would now take 4.6 months to deplete the stock of existing homes for sale, a marginally tighter figure than the 4.7 month count a month earlier.

After a post-recession peak of 5.44 million annualized units in November 2009, the existing home market has meandered along.  March’s tally is the best monthly figure since September 2013, so better times could be ahead.  It is easy to imagine that certain parts of this country were impacted by the tough winter.  Perhaps pent up demand is blossoming as a new season matures.            (by C. Cox)