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lite.cnn.com - on gopher - inofficial
ARTICLE VIEW:
/
US homes sales dropped last month as March prices reached a record high
By Bryan Mena, CNN
Updated:
12:27 PM EDT, Thu April 18, 2024
Source: CNN
Sales of previously owned homes in the United States fell in March as
home prices climbed and mortgage rates held steady that month,
reflecting the persistent pain of America’s affordability woes and
undermining the crucial spring homebuying season.
Existing home sales, which make up the majority of the housing market,
fell 4.3% in March to a seasonally adjusted annual rate of 4.19
million, the sharpest drop in more than a year, the National
Association of Realtors reported Thursday. Sales fell across the
country except in the Northeast region, which saw an increase for the
first time since November 2023.
Meanwhile, the median price of an existing home was $393,500 last
month, an increase of 4.8% from a year earlier. That was the highest
March price on record. Rising home prices coupled with mortgage rates
stuck at elevated levels means Americans are still dealing with a tough
housing market.
Home sales are up from the decades-lows seen last fall and were off to
this year, but now that momentum seems to have come undone. Sales might
not rise meaningfully higher
“Though rebounding from cyclical lows, home sales are stuck because
interest rates have not made any major moves,” NAR chief economist
Lawrence Yun said in a release. “There are nearly six million more
jobs now compared to pre-Covid highs, which suggests more aspiring
homebuyers exist in the market.”
A difficult road ahead for the market?
Mortgage rates play a key role in determining housing affordability.
That could be a frustrating sticking point.
Last year, home sales were in the doldrums at their lowest level in
nearly three decades as mortgage rates shot up, reaching a two-decade
high of 7.79% in October.
Then mortgage rates began to decline on hopes that the Fed would cut
interest rates aggressively in 2024, but those expectations have been
thrown out the window. and signs that the economy remains strong are
keeping the Fed in wait-and-see mode, pushing back the timing of the
first rate cut. Mortgage rates have but are poised to rise because they
track bond yields, which are climbing on persistently high inflation
readings.
Home prices nationwide, which also play a role in affordability,
haven’t retreated in any meaningful way.
One bright spot in NAR’s latest report on existing home sales: There
was an increase in first-time homebuyers trickling into the market.
They represented 32% of all transactions in March, up from 26% in
February and 28% higher than a year ago, while the share of buyers who
were investors declined in March.
“Good to see that number go up above 30%” Yun said. That may be
“because people heard about the lawsuit settlement where the buyers
possibly need to come up with extra funds to pay up some professional
representation, but they want to do it before the new rules takes place
sometime in July,” Yun added.
A historic NAR settlement, which was announced in March and is expected
to change how homebuyers and sellers pay their real estate agents,
hasn’t been approved by the courts yet. But it is through the real
estate industry, with some buyers saying they plan to begin searching
for a home before the new rules take effect.
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