After reporting a significant increase in U.S. existing home sales in the previous month, the National Association of Realtors released a report on Tuesday showing existing home sales pulled back sharply in the month of March.
NAR said existing home sales plunged by 8.5 percent to an annual rate of 5.27 million in March after spiking by 6.3 percent to a revised of 5.76 million in February.
Economists had expected existing home sales to plummet 8.1 percent to a rate of 5.30 million from the 5.77 million originally reported for the previous month.
Despite the steep monthly decline, existing home sales in March were up by 0.8 percent compared to the same month a year ago, reflecting the ninth straight month of year-over-year growth.
“Unfortunately, we knew home sales would wane in March due to the coronavirus outbreak,” said NAR chief economist Lawrence Yun. “More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise.”
The report said the median existing home price for all housing types was $280,600 in March, up 3.8 percent from $270,400 in February and up 8.0 percent from $259,700 in the same month a year ago.
NAR also there were 1.50 million homes for sale at the end of March, up 2.7 percent from 1.46 million at the end of February but down 10.2 percent from 1.67 million at the end of March 2019.
The unsold inventory represents 3.4 months of supply at the current sales pace compared to 3.0 months in February and 3.8 months a year ago.
“Earlier in the year, we watched inventory gradually tick upward but with the current quarantine recommendations in place, fewer sellers are listing homes, which will limit buyer choices,” Yun said.
He added, “Significantly more listings are needed and more will come on to the market once the economy steadily reopens.”
The report also said single-family home sales tumbled by 8.1 percent to an annual rate of 4.74 million in March, while existing condominium and co-op sales plunged by 11.7 percent to a rate of 530,000.
On Thursday, the Commerce Department is scheduled to release a separate report on new home sales in the month of March.
Economists expect new home sales to nosedive by 15.7 percent to an annual rate of 645,000 in March after slumping by 4.4 percent to a rate of 765,000 in February.
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