Sales of existing homes rose 6.1 percent in March to their highest level in 18 months as price and inventory gained, signaling that the housing market may have regained some of the buoyancy it showed the second half of last year.
The National Association of Realtors reported that purchases of previously occupied homes rose to an annual rate of 5.19 million, beating the 5.03 million forecast and April’s revised 4.89 million by a wide margin. It was the strongest selling pace since September 2013 and the biggest one month rise since December 2010.
The median home price climbed 7.8 percent to $121,100 from a year earlier, three times the 2.6 percent increase in April. The number of homes on the market increased 5.3 percent to 2 million, though the higher selling pace in March dropped the market clearing time to 4.6 months from 4.7 in February.
Home sales traditionally are strongest from April to August, but the month with the highest sales rate has been erratic since the recession. In 2009 the peak came in November, in 2010 in May, in 2011 in January, in 2012in November, in 2013 in July and last year the highest selling rate was in October. Houses sold in an average 52 days in March, the quickest turnaround since July.
Home sales have been constrained by a lack of offered properties which has driven up home prices and limited choice for potential buyers. In prior years, many homes were short sales, where the house is worth less than the selling price or foreclosures. But fewer homeowners are defaulting on their mortgages, meaning fewer foreclosed properties in the pipeline to inflate supply, and the majority of short sales have already cleared the markets. Distressed properties were 10 percent of total sales, down from 11 percent in February.
First time home buyers were 30 percent of purchase last month, substantially below the 40-45 percent shares that analyst think is needed for a healthy market.
Sales went up in all four U.S. regions. The Midwest saw a 10.1 percent gain, and that despite the long winter which some analyst has faulted for weak statistics in other areas. Purchase increased 6.9 percent in the Northeast, 6.3 percent in the West and 3.8 percent in the South.
Sales of single-family homes rose 5.5 percent to an annual rate of 4.59 million, the best since August 2013. Multifamily properties including condominiums jumped 11.1 percent.
A separate report form the Mortgage Bankers Association indicated that loan applications rose 5 percent in the week ending April 17th, the highest level since June 2013. It was the fourth gain in five weeks.
A 30 year fixed rate mortgage cost 3.74 percent yesterday just 0.1 percent above the low of the last two years, according to Bankrate.com. Rates have been trending lower since 2013 after reaching reached a peak of 4.67 percent that September.
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