Following February’s surge, March saw a slip in home sales, according to the National Association of Realtors (NAR). NAR reports that total existing-home sales including single-family homes, townhomes, condominiums and co-ops, fell 4.9% from February to a seasonally adjusted annual rate of 5.21 million in March. Sales as a whole are down 5.4% year over year.
“It is not surprising to see a retreat after a powerful surge in sales in the prior month,” said NAR Chief Economist Lawrence Yun. “Still, current sales activity is underperforming in relation to the strength in the jobs markets. The impact of lower mortgage rates has not yet been fully realized.”
Despite the decline in sales, inventory jumped slightly in March month over month, up to 1.68 million from February’s 1.63 million existing homes available for sale, a 2.4% increase year over year.
“Further increases in inventory are highly desirable to keep home prices in check,” says Yun. “The sustained steady gains in home sales can occur when home price appreciation grows at roughly the same pace as wage growth.”
According to realtor.com Chief Economist Danielle Hale, this year’s momentum shows promise.
"January pending home sales led to strong February existing home sales but that momentum slipped in March with sales down 4.9 percent from revised February figures and down 5.1 percent from last March. Prices showed continued gains, but lost some ground registering up 3.8 percent from a year ago compared with 3.9 percent last month,” said Hale. “Even if home sales lose some momentum month to month, they will likely be able to better keep pace with last year's sales in the months ahead as a result of increased buyer purchasing power from lower mortgage rates. In fact, the year over year sales decline abated from 7.5 percent in the fourth quarter to 5.4 percent in the first quarter."
NAR notes that homes stayed on the market for an average of 36 days in March, down from 44 days in February, but up from 30 days year over year.