Existing Home Sales Surged In March, As Prices Also Gain

Existing Home Sales Surged In March, As Prices Also Gain

Despite rising prices and tight inventories, sales of U.S. existing homes rebounded in March, surging to the highest rate in 10 years, an industry group reported Friday.

Last month, sales hit a seasonally adjusted rate of 5.71 million, the Wall Street Journal reported, citing figures from the National Association of Realtors.

Home sales jumped in the Buckeye State and across the nation during March, as buyers - apparently undeterred by rising prices - pounced faster. Listing shortages are an ongoing source of frustration for the housing industry, since sales might be higher if buyers weren't struggling to find available homes in desirable locations at palatable price points.

Meanwhile, the median price for an existing home was $236,400, up 6.8% from March 2016's $221,400 and marking the 61st consecutive month of year-over-year gains. While the number of homes on the market rose 5.8 percent to 1.83 million units last month, housing inventory was down 6.6 percent from a year ago.

Properties typically remained on the market for 34 days in March, compared to 45 days in February, the NAR added.

The consensus estimate called for sales to reach 5.605 million, according to a survey of economists polled by Bloomberg. First-time home buyers also made little progress, accounting for 32% of the market.

Buyers closed on purchases of 12,245 homes, at an average price of $163,382 - up 6.2 percent from the same month of past year.

Distressed sales, which include foreclosures and short sales, were at 6 percent - 1 percentage point lower than a month ago, and a 2 percentage point drop from January 2016.

The gains were mostly seen in the single-family segment where transactions increased 4.3 percent to 5.08 million.

"A growing pool of all types of buyers is competing for the lackluster amount of existing homes on the market", Yun said. Although the average 30-year mortgage rate dipped during the last week to just below 4 percent, in March the average was 4.20 percent, according to the Federal Home Loan Mortgage Corp.

Recent gains in pending home sales, which lead existing-home sales by a few months, had signaled a rebound in existing sales. "Over the past year home sales under $100,000 fell 7.1 percent while sales between $500,000 and $750,000 went up by 32.1 percent, due to builders' focus on the higher-end market".

In the West, existing-home sales decreased 1.6 percent to an annual rate of 1.22 million.

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