Existing Home Sales - March Report
Existing Home Sales - Down Five Months in a Row
The sales pace of existing homes was expected to cool off a bit in January (no weather puns intended), but they slowed a tad bit more than expected to an annual pace of 6.56 million homes. This is down 2.81% from last month and 5.2% from the same period a year ago.
Most news articles are blaming the lower sales figures on higher interest rates, but over the last year mortgage rates have only increased about a half percent. That small spike would not even affect the higher-end market. More likely is that buyers are becoming more wary because of the "housing bubble" speculation in the news, AND some homeowners and speculators are trying to cash out during what they perceive as the "top" of the market.
In other words, gone are the days when you can just "pop" a home on the market and expect multiple offers.
Sales figures are released by the National Association of Realtors and are adjusted to take seasonal factors into account. So the annual "seasonally adjusted" sales pace for December was 6.56 million homes. The sales pace for December was originally reported at 6.6 million homes, but it was later revised upward to 6.75 million. Otherwise the graph would look almost flat for January.
Regionally, the largest decline occurred in the Northeast, down 10%. Sales were down in the Midwest by 7.69% and down in the West by 3.52%. The bright spot in this month's report is that sales were actually UP by 2.61% in the South. Sales are probably up in the South because of people moving back into the hurricane ravaged Southern states, including New Orleans.
The "annual sales pace" doesn't describe how many homes were actually sold during the month, but calculates how many homes would sell in a year if that month's sales pace continued, taking into account seasonal adjustments.
Inventory Trend is "UP"
Inventory measures how long it would take to sell all the houses currently "for sale" at the present sales pace. You can see from the graph that there has been a definite trend toward longer inventory times.
This trend indicates that there are fewer buyers for the number of homes available for sale than there were just a few months ago.
At the current sales pace, it would take 5.3 months to sell all the homes currently available for sale.
Regional Price Appreciation
Nationally, the median average sales price increased 11.64% over the last year. Regionally, prices increased by 12.08% in the Midwest, 11.51% in the West, 9.52% in the Northeast, and 5.33% in the South.
So far, appreciation sounds pretty good. However, most of that appreciation occurred during the first six months of the year. Take a look at the graphs (click on the link below) and you'll get the idea.
The median average is the "midpoint" sales price. Half the home were sold above that price and half below.