Insight from realtor.com reveals that the national inventory fell 15.7% annually in March, which is faster than the 15.3% year-over-year drop reported in February.
This equates to a loss of 191,000 listings compared to March 2019. Realtor.com added the year-over-year decline in inventory could be “softening,” which the report says could be an early indicator of slowing buyer activity due to COVID-19.
The volume of newly-listed properties in March fell by 6.4% since last year and for newly-listed properties for the week ending on March 28 fell by 34% annually—the biggest decline this year.
Housing inventory in the 50 largest U.S. metros declined by 17.1% year-over-year in March. The metro of Phoenix-Mesa-Scottsdale, Arizona, saw the largest decline in inventory at 42.2%. Only Minneapolis-St. Paul-Bloomington, MN-WI (3.6%) saw inventory increase over the year.
Realtor.com also reported the average property is selling quicker than last year, as homes sold in 60 days in March, which is four days quicker than March 2019,
The average listing price grew by 3.8% to $320,000 in March, which is a slight drop from the prior month’s 3.9% annual growth. However, prices for the week ending on March 28 grew by just 2.5% year-over-year—the slowest pace of growth this year and the slowest since data has been tracked since 2013.
An additional forecast from NerdWallet expects mortgage rates to fall below the levels of March, possibly settling in around 3.5%, or lower, through April.
“Low and steady rates would please home buyers, too—those who brave the housing market during an epidemic,” the report said
NerdWallet said rates rose slightly in March due to the “turbulence” in bond markets.
“Bondholders sold their bonds to stockpile cash. These sales depressed bond prices, including prices for mortgage-backed securities, which pushed mortgage rates higher,” the report said.
A volatile market is sending mixed signals for prospective buyers. While the Mortgage Bankers Association reported applications rose 15.3% from the prior week ending on March 27, the purchase index fell 24% year-over-year.
"Mortgage rates and applications continue to experience significant volatility from the economic and financial market uncertainty caused by the coronavirus crisis. After two weeks of sizeable increases, mortgage rates dropped back to the lowest level in MBA's survey, which in turn led to a 25 percent jump in refinance applications," said Joel Kan, MBA's AVP of Economic and Industry Forecasting. "The bleaker economic outlook, along with the first wave of realized job losses reported in last week's unemployment claims numbers, likely caused potential homebuyers to pull back. Purchase applications were down over 10 percent, and after double-digit annual growth to start 2020, activity has fallen off last year's pace for two straight weeks."