By Manuel Gutierrez, Consulting Economist to NKBA
After February’s rebound in existing home sales, when they jumped by 13.8 percent to a 4.55 million annual rate, sales in March fell back by 2.4 percent to a rate of 4.44 million. March’s sales drop followed a pattern of steady monthly declines that began in January of last year. Compared to a year earlier, sales in March were 21.1 percent lower than the 5.69 million rate seen in March 2022.
- Existing home sales fell in virtually all four regions in March — with the only exception being the Northeast, where sales remained at the same rate as reported in February, at 520 thousand. The biggest drop was seen in the Midwest (5.5 percent to 1.03 million), followed by the West (3.5 percent to 820 thousand) and the South (1.0 percent to 2.01 million).
- Prospective home buyers are still constrained by a shortage of existing homes to purchase. The inventory of homes for sale increased little in March, rising by only 1.0 percent, or 10 thousand homes, from the previous month. This inventory was higher than its level a year earlier, by 50 thousand homes. However, it was equivalent to only 2.6 months of sales at the current rate in March — still lower than the 3.2 months’ supply maintained over the last six years.
- The median sales price of all existing homes fell by nearly one percent (0.9 percent) in March to $376 thousand. This drop brought home prices farther below the historical high of $414 thousand reached in the middle of last year. Compared to a year earlier, the highest prices were seen in the West ($565 thousand, up 7.5 percent), followed by the Northeast ($395 thousand, up 1.0 percent), the South ($348 thousand, up a negligible 0.3 percent) and the Midwest ($273 thousand, up 1.7 percent).
- In the first quarter of 2023, 860 thousand existing homes were sold — 26 percent fewer than in the same period last year. Compared to the first quarter of last year, sales were down in all four regions by similar magnitudes. The biggest decrease was seen in the West (down 32.6 percent to 163 thousand homes sold), followed by the Northeast (down 27.1 percent to 94 thousand), the South (down 24.5 percent to 417) and the Midwest (down 21.5 percent to 186 thousand).
