Existing Home Sales Sink 4.3 Percent, Expect More Weakness

Existing home sales resumed their slide in March after two-month rally to start the year.

The NAR reports Existing-Home Sales Descended 4.3% in March

Key Highlights

• Existing-home sales retreated 4.3% in March to a seasonally adjusted annual rate of 4.19 million. Sales fell 3.7% from the previous year.
• The median existing-home sales price rose 4.8% from March 2023 to $393,500 – the ninth consecutive month of year-over-year price gains and the highest price ever for the month of March.
• The inventory of unsold existing homes grew 4.7% from one month ago to 1.11 million at the end of March, or the equivalent of 3.2 months’ supply at the current monthly sales pace.
• First-time buyers were responsible for 32% of sales in March, up from 26% in February and 28% in March 2023.
• Individual investors or second-home buyers, who make up many cash sales, purchased 15% of homes in March, down from 21% in February and 17% in March 2023.

Existing-Home Sales Percent Change from Month Ago

Since February of 2022 existing home sales have only risen 5 out of 26 months.

Existing-Home Sales Supply

At the current rate of sales, the supply of homes for sale is 3.2 months.

Existing-Home Sales Percent Change from Year Ago

Data on the St. Louis Fed is limited. Year-over-year sales are down for at least 21 consecutive months.

At some point, year-over-year sales will rose but don’t make too much of it. It will be due to easy to beat prior year comparisons. The following chart puts sales into the proper perspective.

Existing-Home Sales Since 1968

Existing home sales have fallen to 4.19 million, about where they were in November of 1978.

The Civilian Noninstitutional Population (age 15+ not in the military or prison, etc.) was 132.9 million. As of March 2024 it was 267.9 million.

Adjusted for population growth, current sales are about 2.1 million annualized, close to the 1982 bottom.

Housing Starts Plunge 14.7 Percent

Housing starts plunged in March, but for the past year, it’s really a tale of two markets, single-family vs multi-family.

On April 16, I noted Housing Starts Plunge 14.7 Percent, Multi-Family Very Weak For a Year

Multi-family construction has collapsed 42.2 percent since January 2023.

In contrast, single-family construction is up 24 percent.

It seems builders have been adding too many apartments and/or financing is such that it makes no sense to build multi-family units.

That observations begs the following question.

When Will Housing Units Under Construction Impact the Price of Rent?

The number of housing units under construction topped 1.4 million in August of 2022 and has been there ever sense.

Yesterday, I asked When Will Housing Units Under Construction Impact the Price of Rent?

It’s a complex question with a lot of parts, but possibly we see some steeper year-over-year moves in rent prices starting May or June.

The title of my post says “Expect More Weakness”. That’s because mortgage rate are back well above 7 percent to 7.4 percent after having dipped to 6.6 percent in December.