April 21, 2017 – Existing home sales provide the number of purchases made for homes, condominiums, and co-ops that have already been built. Existing home sales give an indication of demand for housing. While home resales may not generate new construction jobs like those that housing starts do, they have a similar effect on consumer spending as people purchase items for their new home.
Existing home sales rose 4.4% in March to an annualized rate of 5.710 million. This comes in above expectations of an annualized rate of 5.605 million and February’s revised 5.470 million level. This marks the best rate since February 2007. Single-family homes rose 4.3% while multi-family units (condos) rose 5.0%. Existing resales are now up 5.9% over the last year. Single-family sales and multi-family sales are both up over the last year, 6.1% and 5.0%, respectively. The median home price rose to $236,400, up 3.6%. Supply increased 1.830 million, but due to the increase in sales, the months’ supply remained at 3.8 months. The average number of days on the market has dropped to 34 days from 45 days in February.
A very solid month for the resale market as prospective homebuyers come out for the spring season. Total resales reached their highest levels since early 2007 despite the tight inventory. With the months’ supply at 3.8 months, there is plenty of demand to match a rising inventory. With a larger inventory, we may see sales jump higher from here. On the interest rate side, the average 30-year mortgage rate dipped below 4% for the first time since November, suggesting that rates are not increasing as had been widely expected initially.