The 'unique' housing market zig zags again as existing-home sales decline amid volatile mortgage rates
- Existing-home sales slipped 2.4% month over month in March, the National Association of Realtors said.
- The decline comes as mortgage rates have been volatile recently.
Existing home sales slid 2.4% in March compared to the prior month, according to Thursday data from the National Association of Realtors.
That followed a 14.5% jump in February that ended 12-month streak of declines. But last month, existing home sales fell to an at an annualized rate of 4.44 million, less than the 4.5 million expected by economists, per Bloomberg.
The median sales price on existing homes fell to $375,700, down 0.9% compared to the same time last year.
"Home sales are trying to recover and are highly sensitive to changes in mortgage rates," NAR chief economist Lawrence Yun said in a statement. "Yet, at the same time, multiple offers on starter homes are quite common, implying more supply is needed to fully satisfy demand. It's a unique housing market."
At the same time, the NAR said housing inventory at the end of March hovered at 980,000, up about 1% from the month prior, and 5.4% higher than a year ago.
Additionally, roughly 65% of March's home sales were on the market for fewer than 30 days, down from 34 days in February.
"Home prices continue to rise in regions where jobs are being added and housing is relatively affordable," Yun said. "However, the more expensive areas of the country are adjusting to lower prices."
The NAR data follows recent volatility in mortgage rates, which soared to 7% last fall amid aggressive Fed rate hikes, then retreated as inflation cooled, rose again on signs of a tight labor market, and fell back after Silicon Valley Bank collapsed.
Freddie Mac that said the 30-year fixed-rate mortgage dropped to 6.27% last week, compared to 6.28% the week before. But the Mortgage Bankers Association said Wednesday that the 30-year rate increased by the most in two months to 6.43%, snapping five straight weeks of declines.
"With overall consumer price inflation calming and rents expected to decelerate from robust apartment construction, the Federal Reserve's monetary policy will surely shift from tightening to neutral to possibly loosening over the next 12 months," Yun maintained. "Therefore, home sales will steadily rebound despite several months of fluctuations."