By Nicole Friedman
The median sales price for previously owned homes climbed to a
new record high in March as a shortage of homes limited
Existing-home sales dropped 3.7% in March from February to a
seasonally adjusted annual rate of 6.01 million, the National
Association of Realtors said Thursday, marking the second straight
month of sales declines. March sales marked a 12.3% increase from a
Economists surveyed by The Wall Street Journal expected a 1.8%
monthly decline in sales of previously owned homes, which make up
most of the housing market.
The housing market boomed in 2020, with home sales hitting the
highest level in 14 years, due to low interest rates and new demand
for housing spurred by the Covid-19 pandemic. But the pandemic also
exacerbated a lack of inventory in the market. Buyers are competing
fiercely for a limited number of homes, pushing prices sharply
"The softening sales activity is not due to demand going away.
Demand remains strong," said Lawrence Yun, NAR's chief economist.
"It is the lack of inventory that is hindering the sales
The median existing-home price rose 17.2% in March from a year
earlier to $329,100, a record high, NAR said. The annual price
appreciation was the strongest in data going back to 1999.
The typical home that sold in March spent 18 days on the market,
the fastest pace on record and down from 20 days in February, NAR
Spring is usually the busiest time of year for home sales, as
families try to move homes before the start of a new school
Some real-estate executives say inventory is likely to increase
in the coming months, as sellers try to take advantage of spring
activity. Increased vaccination rates could also make sellers feel
more comfortable about the potential risk of letting strangers tour
There were 1.07 million homes for sale at the end of March, up
3.9% from February and down 28.2% from March 2020. At the current
sales pace, there was a 2.1-month supply of homes on the market at
the end of March.
Nationally, there were more real-estate agents in March than
there were houses to sell, according to NAR.
Christine Reedy noticed the inventory shortage when she started
browsing online listings in Bel Air, Md., in February.
"There wasn't a ton available, and whatever would come up, that
stuff was gone within a day," she said. "It took maybe a week or
two before I even saw a house that I wanted to go see."
She bought a three-bedroom townhouse in March for $270,000.
"Somewhere distantly in my mind I was like, 'Yeah, someday I
want to own a home,' but it never seemed like a solid reality to
me," said Ms. Reedy, who is 34 years old and works as a technical
writer. "It feels really good."
Existing-home sales fell the most month-over-month in the West,
down 8%, and in the South, down 2.9%.
Severe winter weather spread across much of the country in
February, including widespread power outages in Texas.
Sales were especially strong at the high end of the market, with
the number of homes selling that were priced over $1 million more
than doubling in March compared with a year earlier, according to
Homes typically go under contract a month or two before the
contract closes, so the March figures largely reflect purchase
decisions made in February or January.
But shopping activity picked up in March, which could indicate
increased home sales later this spring, according to real-estate
technology provider ShowingTime. There were more than 10 home
showings on average per active listing in 129 markets in March, up
from 82 markets in February, ShowingTime said. Denver and Seattle
had the most activity in March, with an average of 25 showings per
listing in each city.
Demand for newly built homes has also climbed in the past year.
But builders' ability to increase production is limited by
shortages of land, labor and materials.
A measure of U.S. home-builder confidence rose in April, the
National Association of Home Builders said last week. Housing
starts, a measure of U.S. home-building, increased 19.4% in March
from February, the Commerce Department said last week. Residential
permits, which can be a bellwether for future home construction,
News Corp, owner of The Wall Street Journal, also operates
Realtor.com under license from the National Association of
Write to Nicole Friedman at email@example.com
(END) Dow Jones Newswires
April 22, 2021 10:54 ET (14:54 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.