1 of 2 | Data show sales for existing homes slumped last month and first-time buying was only slightly above the all-time low set in November, the National Association of Realtors found. File photo by Alexis C. Glenn/UPI |
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April 20 (UPI) -- More signs emerged Thursday that the U.S. housing market is slowing down, with the National Association of Realtors reporting existing-home sales declined month-on-month in March.
NAR data show sales for existing homes totaled 4.4 million in March, a 2.4% decline from February and 22% below the same period last year. The number of homes sitting on the market represented what NAR considered a 2.6-month supply, unchanged from February but 0.6% higher than year-ago levels.
"Home sales are trying to recover and are highly sensitive to changes in mortgage rates," said NAR Chief Economist Lawrence Yun. "Yet, at the same time, multiple offers on starter homes are quite common, implying more supply is needed to fully satisfy demand. It's a unique housing market."
Data on mortgage applications was lower as well. The Mortgage Bankers Association on Wednesday reported that higher lending rates have led to a 10% decline in loan applications as would-be buyers face affordability challenges and limited inventory.
The overall situation may be shifting as well toward something of buyer's market, with the NAR reporting a 0.9% decline in the price for an existing home -- from $379,300 in March 2022 to $375,000 last month.
More than half of the existing homes on the market, meanwhile, were sold in less than a month in March. First-time buyers accounted for 28% of total sales for existing homes last month, just 2% higher than the all-time low from November.
Yun, however, was somewhat upbeat about the prospects for new sales, given signs that inflation is easing and the Federal Reserve could pause rate hikes later in the year.
"Therefore, home sales will steadily rebound despite several months of fluctuations," he said.
The Fed is widely expected to increase rates by another 25 basis points next month, though that could be the last one for the year. The Beige Book, a summary of economic conditions across the 12 districts, painted a mixed picture on the health of the economy.
"Prices for homes and rents leveled out in most districts but remained at near record highs," the report read.
