Existing home sales rose for a second consecutive month
The US National Association of Realtors (or NAR) releases a monthly report on the existing home sales (ITB) market. Trends in existing housing inventory, total housing inventory, median home prices, and mortgage rates are published in the report. The changes in existing home sales data help us understand the trends in the secondary housing market (REM).
According to the NAR’s April 2018 report, existing home sales rose 1.1% to a seasonally adjusted annual rate of 5.6 million homes in March compared to 5.5 million homes in February—the second consecutive jump in existing home sales after January sales were reported to be the lowest in three years.
Concerns about the existing market
Sales remained below the previous year’s level due to a limited supply of homes in the market. Rising rates are also likely to affect the existing home sales market, as the average commitment rate for a 30-year mortgage increased for a sixth straight month to 4.4% from 4.3% in February. Lawrence Yun, the chief economist at NAR, said that existing home sales had bounced back from a weather-impacted decline. He also said that low supply and increasing prices remain a concern for the existing home sales market.
Price and inventory trends in the housing market
House prices in the United States have increased for 73 consecutive months year-over-year. The median existing-home price (FTY) across the United States in March was $250,000, up 5.8% from the same period in the previous year. Total housing (EQR) inventory increased by 5.7% to 1.7 million listings, but it was still 7.2% lower than the previous year’s availability. First-time buyers contributed 34% of March sales, while 50% of total units sold in March stayed on the market for fewer than 30 days.
Overall, the housing market’s (IYR) rebound in March was primarily due to multifamily units. Rising rates could pose a threat to the sector’s continued growth—at least in the short term.