Prices of existing homes in the United States soar due to limited supply
Relentlessly rising US home prices and tight supply threaten to chill the hottest housing market in 15 years, sidelining frustrated homebuyers.
The median price of existing home sales hit $ 329,100 in March, a new high according to the National Association of Realtors. Prices climbed 17.2% last month from a year earlier, marking the biggest price increase in NAR data since 1999.
Rising prices, combined with a scarcity of inventory that left millions of homes in the US real estate market below buyer demand, slowed the market at the start of the peak spring sales season.
NAR said Thursday that sales of existing homes fell 3.7% in March from February, the second consecutive month of declining sales.
Supply constraints create a fiercely competitive bidding climate where homes stay on the market for shorter periods of time than ever before. The typical house that sold in March spent just 18 days on the market, the fastest pace on record, NAR said.
“The slowdown in sales activity is not due to the drop in demand. Demand remains strong, ”said Lawrence Yun, chief economist of NAR. “It is the lack of stocks that is slowing down commercial activity.
The harsh winter weather in February, including widespread power outages in Texas, does not appear to have had much of an impact on home sales, NAR data suggests. Buyers mostly felt upset with other buyers.
Christine Reedy noticed the housing shortage when she started browsing the listings online in Bel Air, Maryland. “There wasn’t a ton of it available, and whatever happened, that stuff was gone in a day,” she said. “It took maybe a week or two before I even saw a house that I wanted to go and see. “
Finally, she bought a three-bedroom townhouse in March for $ 270,000.
“Somewhere in the distance in my mind I was like, ‘Yeah, someday I want to own a house,’ but that never felt like a solid reality to me,” said Ms. Reedy, a 34-year-old. who works as a technician. writer. ” It feels really good. “
Spring is when many families are trying to buy a home so they can move out before a new school year begins, one of the reasons it’s the busiest time of the year. Some real estate officials say inventories are expected to rise over the next few months as sellers try to take advantage of seasonal activity. Rising vaccination rates could also make sellers more comfortable with the potential risk of letting strangers visit their homes.
Supply edged up in March to 1.07 million homes for sale, 3.9% more than in February. But that amount was 28.2% lower than what was available in March 2020. At the current pace of sales, there was a 2.1-month housing supply on the market at the end of March.
“It’s such a frustrating market right now for buyers,” said Dan Canfield of Accel Realty Partners. Around Boise, Idaho, most homes get 15 to 25 bids, he said, although some draw close to 100. Even buyers who can pay in cash face competition and struggle to find it. get the offers accepted, he said.
“It’s like you have to give up your soul and even some to compete for a home right now,” Mr. Canfield said.
The housing market exploded in 2020, with home sales reaching their highest level in 14 years, due to low interest rates and new housing demand spurred by the Covid-19 pandemic.
Existing home sales fell the most month-over-month in the West, down 8%, and in the South, down 2.9%.
Sales were particularly strong at the high end of the market, with the number of homes selling over $ 1 million more than doubling in March from a year earlier, according to NAR.
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Homes typically contract a month or two before the contract closes, so the March numbers largely reflect buying decisions made in February or January.
But buying activity picked up in March, which could indicate an increase in home sales later this spring, according to real estate technology provider ShowTime. There were more than 10 home visits on average per active listing in 129 markets in March, up from 82 markets in February, ShowTime said. Denver and Seattle had the most activity in March, averaging 25 screenings per ad in each city.
Write to Nicole Friedman at [email protected]
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