The latest New Residential and Existing-Homes Sales Reports from HUD/the U.S. Census Bureau and the National Association of Realtors (NAR), respectively, have both revealed a slowed down housing market in March 2022. As both prices and interest rates continue to climb at a swift pace, March’s numbers give some further insight regarding how the spring market will shakeout. Keep reading below for some brief summaries of both reports.
Existing-Home Sales Experience Slight Decline
NAR’s March Existing-Home Sales Report showed a drop of 2.7% compared to February, making for a seasonally adjusted rate of 5.77 million sales. In addition to the 2.7% month-to-month decline, this was also a drop of 4.5% compared to March of 2021.
Prices continued to remain high in March, with the median price for all housing holding at $375,300. Similar to February, this is a 15% annual increase from the previous year and makes for the 121st month of consecutive increases. With average 30 year mortgage rates increasing by 91 base points in March alone, NAR’s Chief Economist Lawerence Yun has indicated that the market is beginning to feel these effects and purchasing power is waning, while a further slowdown may be coming. He shared:
Home prices have consistently moved upward as supply remains tight… However, sellers should not expect the easy-profit gains and should look for multiple offers to fade as demand continues to subside.
Given the decrease in purchasing experienced by some buyers, inventory actually saw a slight increase to end the month. 950,000 units were available at the end of March, marking an increase of 11.8% from February, thought still a decrease of 9.5% from the previous year. These 950,000 units equal approximately 2 months of supply.
New-Home Sales Continue to Fall
Following February’s trend, new-residential sales also saw a drop for the month of March, decreasing at a rate of 8.6%. The month closed with a seasonally adjusted rate of 763,000 units, a difference of 72,000 units less than the previous month.
In March, prices continued to increase for new-homes, with the median sales price at $436,700 and the average sales price at $523,900. Inventory remained stable at the end of the month at 407,000 units.
With market factors continuing to squeeze buyers and inhibiting their purchasing power, a client’s hesitation to act when they find the right property could cost them substantially in the future. Review these national numbers – as well as data from your local market – to reinforce now is the time to work together!