March US Home Sales Slide to 16-Year Low

Despite an abundance of supply, home sales have fallen across the nation.

Sales of previously-owned homes fell 5.9 percent in March to a seasonally-adjusted annual rate of 4.02 million units, from the previous month, CNBC reported, citing figures from the National Association of Realtors. Sales slowed 2.4 percent from a year earlier.

That’s the slowest pace during the March period since 2009.

Existing-home sales across the West, the priciest market in the U.S., sank 9.4 percent. Despite the drop, it was the only region to see a year-over-year gain because of a surge in the Rocky Mountain states, where job growth is strong. The median price in the West was $621,200, up 2.6 percent.

At the same time, home sales in the Northeast fell 2 percent, while sales in the Midwest dropped 5 percent and sales in the South were down by 5.7 percent, according to the NAR.

“Home buying and selling remained sluggish in March due to the affordability challenges associated with high mortgage rates,” Lawrence Yun, chief economist for NAR, said in a statement. “Residential housing mobility, currently at historical lows, signals the troublesome possibility of less economic mobility for society.”

There was no dearth of available listings. At the end of March, there were 1.33 million units for sale, up 8.1 percent from February and 19.8 percent from a year ago, according to the NAR. More inventory and slower sales are beginning to dampen home prices.

A typical price for a previously-owned home that sold last month was $403,700 — an all-time high for March and up 2.7 percent from a year ago. That, however, is the smallest gain recorded since August.

All-cash sales dropped to 26 percent, from 28 percent; investors represented 15 percent of sales.

Distressed sales, including foreclosures and short sales, represented 3 percent of sales, up from 2 percent a year ago.

“In a stark contrast to the stock and bond markets, household wealth in residential real estate continues to reach new heights,” Yun said. “With real estate asset valuation at $52 trillion, according to the Federal Reserve Flow of Funds, each percentage point gain in home prices adds more than $500 billion to the household balance sheet.”

The NAR tally was based on closings. During that period, the average rate on a 30-year fixed mortgage exceeded 7 percent. It didn’t fall solidly below 7 percent until Feb. 20, according to Mortgage News Daily.

— Dana Bartholomew