Existing-Home Sales Declined 8.5% in March
Washington, DC, April 21, 2020-Total existing-home sales dropped 8.5% from February to a seasonally-adjusted annual rate of 5.27 million in March, according to the National Association of Realtors. Despite the decline, overall sales increased year-over-year for the ninth straight month, up 0.8% from a year ago (5.23 million in March 2019).
“Unfortunately, we knew home sales would wane in March due to the coronavirus outbreak,” said Lawrence Yun, NAR’s chief economist. “More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise.”
While sales have declined, home prices are still solidly strong. The median existing-home price for all housing types in March was $280,600, up 8.0% from March 2019 ($259,700), as prices increased in every region. March’s national price increase marks 97 straight months of year-over-year gains.
Total housing inventory at the end of March totaled 1.50 million units, up 2.7% from February, but down 10.2% from one year ago (1.67 million). Unsold inventory sits at a 3.4-month supply at the current sales pace, up from three months in February and down from the 3.8-month figure recorded in March 2019.
“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. “Significantly more listings are needed and more will come on to the market once the economy steadily reopens.”
NAR’s most recent Flash Survey showed that 93% of sellers changed behavior to help the homebuying transaction move forward with social distancing and necessary precautions.
Properties typically remained on the market for 29 days in March, seasonally down from 36 days in February, and down from 36 days in March 2019. Fifty-two percent of homes sold in March 2020 were on the market for less than a month.
First-time buyers were responsible for 34% of sales in March, up from both 32% in February and 33% in March 2019. NAR’s 2019 Profile of Home Buyers and Sellers-released in late 2019- revealed that the annual share of first-time buyers was 33%.
"Despite the social distancing restrictions, with many Realtors conducting virtual open home tours and with mortgage rates on the decline, a number of first-time buyers were still able to purchase housing last month," Yun said.
Individual investors or second-home buyers, who account for many cash sales, purchased 13% of homes in March, down from both 17% in February and 18% in March 2019. All-cash sales accounted for 19% of transactions in March, down from both 20% in February and 21% in March 2019.
Distressed sales-foreclosures and short sales-represented 3% of sales in March, up from 2% in February, and unchanged from 3% in March 2019.