A Check-Up on Housing Inventory

Existing Home Sales, (closings on existing homes) showed sales were down 2.7% in March at a 5.77 million unit annualized pace. Note that this likely measured activity in January and February when rates were rising but not at the levels they are today. On a year-over-year basis, sales were only down 4.5%, which is still quite strong considering higher rates, higher home prices, and tight inventory.

Speaking of inventory...

There were 950,000 homes for sale at the end of March. While this is an increase of almost 12% from February, inventory is still 9.5% lower than it was in March of last year. There is now a 2 month supply of homes available for sale, which is up from 1.7 months at the end of February. However, a 6 months supply of homes reflects a balanced market.

87% of homes that sold were on the market for less than one month. This should continue to be supportive of home prices. Homes were only on the market for 17 days in March, down from 18 in February.

The median home price was reported at $357,300, up 15% year over year. Note, that the median home price is not the same as appreciation. It simply means half the homes sold were above that price and half were below it. This figure continues to be skewed by the mix of sales, as sales on the lower end are down, while sales above $500,000 are much higher.

-First-time homebuyers accounted for 30% of sales, which is a nice move higher from 29% in the previous report and 27% two months ago.
-Cash buyers increased from 25% to 28%
-Investors purchased 18% of homes, down from 19%.
-Foreclosures and short sales accounted for less than 1% of all transactions.

Single-family Starts and Permits Decline

Housing Starts (measure the start of construction on homes) increased 0.3% in March at an annualized rate of 1.79 million units. Year-over-year, Housing Starts were up 3.9%.

Starts for single-family homes decreased by 1.7% and they were down 4.4% from March of last year.

Building Permits, which are a good forward-looking indicator for Housing Starts, rose by 0.4% last month and they were up 6.7% year-over-year. Yet there were declines as well for single-family permits, by 4.8% monthly and 3.9% year-over-year.