Home Sales Climb Nationwide
Two factors in March led to an increase in national home sales. Continued job creation meant more buyers could afford to move out of their rental units, while low interest rates made that new home more affordable. For the sixth consecutive month, home sales climbed year-over-year; in March, sales were up 10.4 percent from a year earlier. Forty percent of all homes sold stayed on the market for less than a month. On average, it took only 52 days for a home to sell in March. This is a significant improvement from February, when a home stayed on the market for an average 62 days, and March 2014’s average sell time of 55 days.
Sales Across the Country
Existing-home sales were up across the country, not just month-over-month but year-over-year, as well. In the Northeast, sales jumped 6.9 percent from a month earlier and 1.6 percent from a year earlier. Sales in the Midwest and South climbed 10.1 percent and 3.8 percent, respectively. When compared with a year earlier, sales were up 12.1 percent in the Midwest and 11.7 percent in the South. The West also saw an impressive increase in sales, with a 6.3 percent climb from February and an 11.3 percent rise from March 2014.
Home Inventory Increases
At the end of March, there were two million existing homes for sale, a 5.3 percent climb from a month ago and a two percent rise from a year ago. At the current sales pace, it would take 4.6 months for all unsold inventory to sell. While modest, the rise in inventory is a welcome sign after the lack of supply in past months. But it might not be enough to quell rising home prices or provide more affordable options for first-time buyers. An increase in listings and new home construction will boost home sales and stabilize prices.
New Construction Increases
The low interest rates and strong job market didn’t just impact existing-home sales. Builders of new homes also felt the positive effects. The National Association of Home Builders/Wells Fargo Housing Market Index measures builders’ sales perceptions of the current new-home market and their expectations for the next six months. In April, the HMI rose four points to 56, indicating that more builders are seeing the current housing market conditions as improving. What’s more, builders were also optimistic about future sales; the HMI component index that measures future expectations also climbed in April, reaching its highest level of the year.