Existing home sales in March leaped to their fastest pace in 18 months, making a well-timed upturn at the start of the peak spring buying season. Sales rose 6.1% — the largest increase since December 2010 — to a seasonally adjusted annual rate of 5.19 million, the National Association of Realtors said Wednesday. Economists’ median forecast for March sales’ rate was 5.03 million, according to Action Economics’ survey.
Monthly sales last topped a 5 million annual rate in December and March’s rate was the highest since October’s 5.19 million. NAR’s figures cover completed transactions on single-family homes, town homes, condominiums and co-ops. Total inventory at the end of March rose 5.3% to 2 million existing homes available for sale, and 2% above a year ago, NAR said. Unsold inventory is at a 4.6 months supply, down slightly from 4.7 months in February.
That indicates the supply of homes for sale is still tight. A six-month supply is considered a market balanced between buyers and sellers. Other recent signs have pointed to a pick-up in sales. The NAR’s seasonally adjusted pending home sales index hit its highest level since June 2013 in February. The index tracks signings of contracts to buy homes and is an indicator of future sales one or two months later.
Sales of previously owned homes fell 2.9% last year from 2013, but prices also rose more slowly — at 5.7%, about half the rate in the previous year. NAR predicts average prices will rise a similar amount this year. NAR’s report Wednesday showed median prices rose 7.8% from March 2014, accelerating from a 2.6% rate in February to its fastest pace in a year, TD Economics’ Michael Dolega said in a research note Wednesday morning. Single-family homes led the price gains; values increased 8.7% from the previous year, he said.