US home sales up to highest rate for 18 months, latest data shows

Existing home sales in the United States jumped in March to their highest annual rate in 18 months, while unsold inventory showed needed improvement, according to the latest index.

Data from the National Association of Realtors shows that this growth was led by the Midwest, but all major regions experienced strong sales gains in March and are above their year on year sales pace.

Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, increased 6.1% to a seasonally adjusted annual rate of 5.19 million in March from 4.89 million in February, the highest annual rate since September 2013.

Sales have increased year on year for six consecutive months and are now 10.4% above a year ago, the highest annual increase since August 2013. March’s sales increase was the largest monthly increase since December 2010.

According to Lawrence Yun, NAR chief economist, the housing market appears to be off to an encouraging start this spring. ‘After a quiet start to the year, sales activity picked up greatly throughout the country in March,’ he said.

‘The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years,’ he explained.

Prices are also climbing steadily. The median existing home price for all housing types in March was $212,100, which is 7.8% above March 2014. This marks the 37th consecutive month of year on year price gains and the largest since February 2014 when it was 8.8%.

‘For sales to build upon their current pace, home owners will increasingly need to be confident in their ability to sell their home while having enough time and choices to upgrade or downsize. More listings and new home construction are still needed to tame price growth and provide more opportunity for first-time buyers to enter the market,’ said Yun.

The percent share of first time buyers was 30% in March, marking the third time since last March that the first time buyer share was at or above 30%. First time buyers represented 29% of all buyers last month compared to 30% in March 2014.

All cash sales were 24% of transactions in March, down from 26% in February and down considerably from a year ago when they were 33%. Individual investors, who account for many cash sales, purchased 14% of homes in March, unchanged from last month and down from 17% in March 2014. Some 70% of investors paid cash in March.

Distressed sales, that is foreclosures and short sales, amounted to 10% of sales in March, down from 11% in February and 14% a year ago. Some 7% of March sales were foreclosures and 3% were short sales. Foreclosures sold for an average discount of 16% below market value in March, similar to the 17% recorded in in February while short sales were also discounted 16%, up from 15% in February.

Properties typically stayed on the market for a shorter time period in March at 52 days compared to 62 in February and are also selling slightly faster than a year ago when it was 55 days. Short sales were on the market the longest at a median of 165 days in March, while foreclosures sold in 56 days and non-distressed homes took 51 days. Some 40% of homes sold in March were on the market for less than a month.

Single family home sales rose 5.5% to a seasonally adjusted annual rate of 4.59 million in March from 4.35 million in February, and are now 10.9% above the 4.14 million pace a year ago. The median existing single family home price was $213,500 in March, up 8.7% from March 2014.

Existing condominium and co-op sales increased 11.1% to a seasonally adjusted annual rate of 600,000 units in March from 540,000 units in February, and are now 7.1% higher than March 2014. The median existing condo price was $201,400 in March, which is 1.6% higher than a year ago.

A regional breakdown of the figures shows that existing home sales in the Northeast increased 6.9% and are 1.6% above a year ago. The median price in the Northeast was $240,500, which is 1.6% below a year ago.

In the Midwest, existing home sales jumped 10.1% and are now 12.1% above March 2014. The median price in the Midwest was $163,600, up 9.7% from a year ago while existing home sales in the South climbed 3.8% and are now 11.7% above March 2014. The median price in the South was $187,900, up 9.3% from a year ago.

Existing home sales in the West rose 6.3% and are now 11.3% above a year ago. The median price in the West was $305,000, which is 8.3% above March 2014.

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Source: Property News Spain