Existing home sales --- or those completed transactions from previously owned single-family homes, townhomes, condominiums and co-ops --- rose from February's data by 6.1 percent in March, which is the highest sales increase since December 2010 (6.2 percent), reports the National Association of Realtors®.
The association revealed that the seasonally adjusted rate in existing home sales in March is 5.19 milion, the highest annual rate in 18 Months ---same as in September 2013--- from 4.89 million in February.
Generally, the country's major regions performed well based on their recorded sales percent hike in March compared to February---Northeast (6.9) Midwest (10.1) South (3.8) and West (6.3), notes NAR.
Lawrence Yun, chief economist of NAR, said these data show a good spring selling season start for the housing industry. "After a quiet start to the year, sales activity picked up greatly throughout the country in March. The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years," he explained.
Aside from that, at the end of March, there are 2.00 million existing homes available for sale, a 5.3 percent increase from February's and a 2.0 percent from last year's inventory of 1.96 million, notes NAR. "The modest rise in housing supply at the end of the month despite the strong growth in sales is a welcoming sign," Yun added.
However, unsold housing inventory is down from last month's 4.7 month supply, as March has a 4.6-month supply now, adjusted to its sales pace. The healthy value of unsold inventory is 6 months, informed NewsMax Finance.
Thus, Yun said that unsold inventory also needs to be improved by additional listings and more newly-built homes. "For sales to build upon their current pace, homeowners will increasingly need to be confident in their ability to sell their home while having enough time and choices to upgrade or downsize. More listings and new home construction are still needed to tame price growth and provide more opportunity for first-time buyers to enter the market," he said.
Take the case of San Francisco which is the least affordable market in the nation as reported by Realtor.com based on their Mortgage Affordability Report. The city had low home sales in February, according to Reuters, which may be attributed to tight supply.
In the Bay Area, many fear of listing their homes because of limited supply, notes SFGate. Residents are worried that if they sell their homes, there will be no other properties to buy. "The move-up market is pretty much frozen. Even if you can do great on the sale of your property, you are terrified to enter the market as a buyer," Matt Fuller, an agent with Zephyr told the outlet.
Although data of existing sales improved in March, many people are still renting, with homeownership at a "20-year low and expected to fall further," notes CNBC.
