Sales of existing US homes rise fastest in decade

Bloomberg

Sales of previously owned US homes rose more than forecast in March to the fastest pace in a decade, signaling sustained momentum in the housing market despite higher prices and scarce supply, a report from the National Association of Realtors showed.
Contract closings jumped 4.4 percent to a 5.71 million annual rate (forecast was 5.60 million), the highest since February 2007, after a revised 5.47 million the prior month. Median sales price rose 6.8 percent from a year earlier to $236,400. Inventory of available properties fell 6.6 percent from March 2016 to 1.83 million, marking the 22nd straight year-over-year decline.
The stronger-than-expected pickup indicates that steady hiring and healthier household finances continue to underpin demand. That’s coming even as the tight supply keeps boosting property prices faster than wage growth, making them more of a hurdle for potential buyers, though mortgage rates have fallen in recent weeks following a post-election surge. While March data released earlier this week showed single-family housing starts eased, they remain close to the highest level in almost a decade.
“This is a very broad-based recovery” in the housing market, Lawrence Yun, NAR’s chief economist, said at a press briefing accompanying the report. “Both sales as well as prices are running very solidly,” and “buyers are not being deterred by these affordability challenges.” Policy changes could “quickly change” the direction of housing in the second half, he said.
March sales rose in three of four regions, including a 3.4% increase in the South and a 1.6% drop in West At the current pace, it would take 3.8 months to sell the homes on the market, unchanged from February.