As rising mortgage rates and high inflation continue to price out homebuyers and reduce affordability, existing home sales dropped to the lowest level since June 2020, according to the National Association of Realtors (NAR). However, the trend in home price appreciation continued as supply remained tight.
Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, fell 2.7% to a seasonally adjusted annual rate of 5.77 million in March. On a year-over-year basis, sales were 4.5% lower than a year ago.
The first-time buyer share rose to 30% in March, up from 29% in February and down from 32% a year ago. The March inventory level increased from 0.85 to 0.95 million units but was still down from 1.05 million units a year ago.
At the current sales rate, March unsold inventory sits at a 2.0-month supply, up from a near historical low of 1.7-months last month but down from 2.1-months a year ago. This low supply of resale homes is ongoing good news for home construction.
Homes stayed on the market for an average of just 17 days in March, down from 18 days in February and a year ago. In March, 87% of homes sold were on the market for less than a month.
The March all-cash sales share was 28% of transactions, up from 25% last month and up from 23% a year ago.
Tight supply continues to push up home prices. The March median sales price of all existing homes was $375,300, up 15.0% from a year ago, representing the 121st consecutive month of year-over-year increases, the longest-running streak on record. The median existing condominium/co-op price of $322,000 in March was up 11.9% from a year ago.
Geographically, three regions saw a decline in existing home sales in March, ranging from 2.9% in the Northeast to 4.5% in the Midwest. Sales in the West remained unchanged in March. On a year-over-year basis, sales in all four regions decreased in March, ranging from 3.0% in the South to 11.8% in the Northeast.
Meanwhile, the Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI decreased 4.1% from 109.4 to 104.9 in February. On a year-over-year basis, sales were 5.4% lower than a year ago per the NAR data.