The National Association of Realtors reported that sales of existing homes fell 0.2 percent in March to a seasonally adjusted annual rate of 4.59 million units as there appears to have been no spring rebound in home sales after the severe winter weather that saw home sales slow sharply last December. Unfortunately for buyers, home prices continue to rise.
This marks the seventh time in the last eight months that sales have moved lower, a change in direction that came just after the Federal Reserve began talking about tapering their bond purchases, talk that led to sharply higher mortgage rates last year. Of course, that’s about the same time that Wall Street investors began to lose interest in the housing market, a sector that is now clearly facing headwinds.
On a year-over-year basis, sales are now down 7.5 percent, the biggest decline since the housing bubble burst, save for the periods in 2010 and 2011 when the expiration of government subsidies spurred buying surges and subsequent slowdowns.
In contrast to falling sales volume, the median sales price continued to rise, jumping from $189,000 in February to $198,500 in March. This puts home prices up 7.9 percent from a year ago, consistent with the 6.9 percent annual price gain reported by the FHFA earlier today. Low supply was blamed for both lower sales and higher prices, though rising inventory pushed the months of supply metric higher, from 5.0 in February to 5.2 in March.
So far, at least, it is clear that weather wasn’t to blame for the recent housing market swoon.