The housing market got a shot of optimism in the arm Thursday as the National Association of Realtors (NAR) reported that existing-home sales jumped 6.8% in March. With the housing tax credit expiring, buyers are rushing to get a signed contract before April 30.
That equates to a seasonally adjusted pace of 5.35 million units, which also represents a 16.1% year-over-year increase in sales activity. Many of these buyers are first-time homeowners, who accounted for 44% of existing-home purchases in March, according to NAR data.
More homes came on the market in March, upping existing-home inventory to 3.58 million, or eight months worth of supply. However, houses—even distressed properties, which were 35% of sales last month--do appear to be selling. “Foreclosures have been feeding into the inventory pipeline at a fairly steady pace and are being absorbed manageably,” said Lawrence Yun, NAR’s chief economist. “In fact, foreclosures are selling quickly, especially in the lower price ranges that are attractive to first-time home buyers.”
Investors are also entering the market and represented 19% of existing-home sales transactions last month.
In terms of pricing, the median existing-home price did inch up 0.4% in March, landing at $170,700.
On a similar note, the Federal Housing Finance Agency (FHFA) also released its monthly home price index data Thursday. U.S. home prices slipped 0.2% in February compared to the previous month, according to the government agency, whose index is based upon repeat home sale transactions from all 50 states and the District of Columbia involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac.
The FHFA index shows that annual numbers are improving, though, both on a national and regional basis. Year-over-year, prices are down just 3.4% across the country, and some hard-hit areas are even showing gains. The Pacific, which includes the states of Hawaii, Alaska, California, Washington, and Oregon, moved up 0.8% on a monthly basis and 0.6% on a yearly basis.
Alison Rice is senior editor, online, at BUILDER magazine.
Learn more about markets featured in this article: Washington, DC.