ARLINGTON, Va.—Existing-home sales continued to rise for the second consecutive month in March, increasing 1.1%; however, the month's sales were 1.2% lower than a year ago.
NAFCU Research Assistant Yun Cohen pointed out that although monthly inventory rose for the third straight month, affordable inventory is still lacking.
"According to a recent study by Trulia, the number of starter homes for sale plummeted 14.2% between the first quarters of 2017 and 2018," Cohen said in a NAFCU Macro Data Flash report. "Meanwhile, the portion of income needed to buy a starter home increased by a substantial 4.2 percentage points. This was in part due to rising mortgage rates, which hit a four-year-high in April according to Freddie Mac."
Existing-home sales rose to a seasonally adjusted annual rate of 5.6 million in March. Cohen added that demand for housing remains strong because of the healthy economy and labor market.
Sales increased in two of the four regions in March: sales in the Northeast increased 6.3% and in the Midwest 5.7%, while sales fell in the West (-3.1%) and South (-0.4%).
Based on current sales, there were 3.6 months of supply at the end of March, up slightly from February. Analysts consider six months of supply to be roughly balanced between supply and demand. Inventory rose 5.7% in March, but it was 7.2% lower than a year ago, Cohen said.
The median existing-home price increased from $240,900 in February to $250,400 (not seasonally adjusted) in March. This is 5.8% higher than the median price from a year ago, Cohen explained.