The positive rebuttals to COVID didn’t last, and by the end of March, the real estate bubble burst. Home sales dropped to their lowest level since 2009. There were 1.33 million units available for sale, representing an almost 20% year-over-year increase from March of 2024. At the current pace of sales, that’s a four-month supply of homes for sale. This represents a stark difference from the six-month supply that typically indicates a healthy and balanced market between buyers and sellers.
Readily accessible unit counts are based on recent closings. These closings were probably due to contracts signed as far back as January/February. As of October 2023, the average rate for the widely used 30-year fixed mortgage climbed over 7%. This spike cemented major affordability barriers for would-be buyers.
In the face of these challenges, the median price of an existing home sold in March hit $403,700. That’s an all-time high for the month! It reflects a bare 2.7% bump over March of 2022. Sales data reveals that transactions decreased in every region of the country month-over-month. Of the four regions, the western area experienced the biggest downturn, falling over 9%.
Sales in March were 2.4% lower than the same month last year, according to the release. Curiously, the west continues to be the only region to post a YOY increase in sales. This unusual occurrence marks a unique success story of extraordinary resilience in the face of near universal downturns.
In March, first time buyers were 32% of the market. That’s a positive sign that some buyers are still out there, despite continued lack of activity in home buying and selling markets overall.
“Home buying and selling remained sluggish in March due to the affordability challenges associated with high mortgage rates,” – Lawrence Yun.
Yun further pointed to strength in the residential real estate market despite mixed signals from the overall economy.
“In a stark contrast to the stock and bond markets, household wealth in residential real estate continues to reach new heights,” – Lawrence Yun.