March 2021 Headline Existing Home Sales: Rate Of Growth Again Slows

The headline existing home sales declined relative to last month with the NAR stating "Consumers are facing much higher home prices, rising mortgage rates, and falling affordability, however, buyers are still actively in the market".

Analyst Opinion of Existing Home Sales

We are now in the "pandemic normal" - and it seems home sales are on a solid growth footing but note that inventory levels are extremely low limiting how many properties can be sold.

We consider this report better than last month, and the rate of growth is decelerating.

Econintersect Analysis

  • The unadjusted sales rate of growth accelerated 7.1 % month-over-month, up 16.3 % year-over-year - sales growth rate trend slowed using the 3-month moving average.
  • The unadjusted price rate of growth accelerated by 0.5 % month-over-month, up 12.4 % year-over-year
  • The homes for sale unadjusted inventory accelerated 1.3 % this month compared to last month and is down 28.2 % year-over-year

NAR reported:

  • Sales down 3.7 % month-over-month, up 12.3 % year-over-year (reported last month +9.1 % year-over-year)
  • Median prices up 17.2 % year-over-year
  • The market (from Econoday) expected an existing home sales level of 5.850 M to 6.670 M (consensus 6.205 M) with a reported value of 6.01 million

The graph below presents the unadjusted home sales volumes comparing growth in every month.

Here are the headline words from Lawrence Yun, NAR's chief economist:

Consumers are facing much higher home prices, rising mortgage rates, and falling affordability, however, buyers are still actively in the market.

The sales for March would have been measurably higher, had there been more inventory. Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising.

Although mortgage rates have risen a tick, they are still at a favorable level and the economic outlook is promising.

At least half of the adult population has received a COVID-19 vaccination, according to reports, and recent housing starts and job creation data show encouraging dynamics of more supply and strong demand in the housing sector.

Without an increase in supply, the society wealth division will widen with homeowners enjoying sizable equity gains while renters will struggle to become homeowners,

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