Homebuyers overcame one of the housing market’s biggest obstacles—an imbalance in supply and demand— in March with a rebound in home sales.
The National Association of Realtors (NAR) reported Wednesday that existing-home sales rose 5.1 percent to a seasonally adjusted annual rate of 5.33 million in March from a downwardly revised 5.07 million in February and 1.5 percent year-over-year.
“Closings came back in force last month as a greater number of buyers – mostly in the Northeast and Midwest–overcame depressed inventory levels and steady price growth to close on a home,” said Lawrence Yun, NAR Chief Economist. “Buyer demand remains sturdy in most areas this spring and the mid-priced market is doing quite well. However, sales are softer both at the very low and very high ends of the market because of supply limitations and affordability pressures.”
Existing-home sales suffered in February due to the continuous imbalance of extremely low inventory levels and rapid home price appreciation. The NAR reported that existing-home sales fell in February 2016 after reaching the highest annual rate in six months last month.
The report found that existing-home sales decreased 7.1 percent to a seasonally adjusted annual rate of 5.08 million in February from 5.47 million in January. However, the report noted that despite last month’s large decline, sales remain 2.2 percent higher than a year ago.
“The lull in contract signings in January from the large East Coast blizzard, along with the slump in the stock market, may have played a role in February’s lack of closings,” Yun explained. “However, the main issue continues to be a supply and affordability problem.
Finding the right property at an affordable price is burdening many potential buyers.”
According to NAR, the median existing-home price for all housing types in March was $222,700, up 5.7 percent from $210,700 in March 2015. This marks the 49th consecutive month of year-over-year gains.
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