May 1, 2023

Existing Home Sales Deeper Dive

The National Association of Realtors released their Existing Home Sales report which measures closings on existing homes. It showed that the sale of homes across the nation was down 2.4% in March. This was in line with estimates and slightly lower than the higher revised February data. Year over year, sales are down 22% but this is not due to the lack of demand but due to the lack of available homes.

Speaking of available homes, inventory levels remained at a very low 980,000 units. At the current pace of sales, there is only a 2.6 months’ supply. Historically this is very tight because four to five months is considered more normal for this time of year. Also, if you take a look at active listings, there are only 563,000, as roughly 40% of the homes counted in the existing inventory were already under contract. This is a dual edge sword, on one end this doesn’t bode well for those searching for homes but on the other end, it speaks to the resiliency of demand and points to the health of the housing market.

Also, within this report, it showed that homes remained on the market on average for 29 days, down sharply from 34 days in the previous report. 65% of homes sold in less than 30 days, up from 57%. First-time homebuyers accounted for 28% of sales, which was up from 27% in the previous report. Cash buyers accounted for 27% of sales, which was down from 28%. Investors made up 17% of transactions, down from 18%.

At first look at this report, it looks like it might have been a weaker one; but as you dig a little deeper, it really does point to a resilient housing market that is just struggling due to the lack of inventory…even in the face of higher interest rates. As more homes get listed the available demand will sop them up.

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By: Jon Iacono
A Family

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