Existing-home sales fell 8.5% in March, according to the National Association of Realtors (NAR).
Despite the monthly decline, overall sales increased annually by 0.8% in March—marking the ninth straight month of gains.
“Unfortunately, we knew home sales would wane in March due to the coronavirus outbreak,” said Lawrence Yun, NAR’s Chief Economist. “More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise.”
Despite the drop in sales, home prices remained strong. The average existing-home price in March was $280,600, which is an 8% year-over-year increase. March’s price increase was the 97th consecutive month for annual gains.
A Redfin report adds credence to this number, saying the average home-sale price rose 7.1% annually and 3.3% monthly to $303,200.
“The impacts of the coronavirus hit the economy hard in mid-March, as we have been reporting in our weekly data, but it's good to step back and take an aggregated look at the market," said Redfin lead economist Taylor Marr. "Real estate activities nearly ground to a halt in some parts of the country by the end of March, disrupted by shelter in place laws. Right now, sellers need to decide if they'll list their home for sale among all the economic uncertainty. On one hand, the number of homes for sale is down more than 20% in recent weeks, even more than the 13% drop we saw for the full month of March, and home prices have so far held better than anyone expected. On the other hand, jobless claims continue to pile up and it is getting increasingly difficult to get a mortgage, which could limit buyer demand. How the market shapes up through the rest of spring will depend heavily on unemployment and the availability of credit."
Active home listings fell 13% annually during March and is the biggest monthly drop since January 2013. March is also the seventh straight month of declines in new home listings.
Redfin states that there were fewer homes for sale last month than any time since January 2012, which is when Redfin began tracking this figure.
Additionally, only three of the 85 largest metros tracked by Redfin posted an annual increase in active listings for home sales. Omaha, Nebraska, led the nation with a 9.9% increase, followed by Minneapolis (5.3%), and El Paso, Texas’, 1.3% rise.
Allentown, Pennsylvania, reported a 42.7% drop in home listings.
The NAR states that total housing inventory at the end of March at 1.5 million units—up 2.7% monthly but down 10% annually from last year’s 1.67 million. Unsold inventory sits at a 3.4-month supply at the current sales pace, which is an increase from three months in February but down from March 2019’s 3.8-month figure.
“Earlier in the year, we watched inventory gradually tick upward but with the current quarantine recommendations in place, fewer sellers are listing homes, which will limit buyer choices,” Yun said. “Significantly more listings are needed and more will come on to the market once the economy steadily reopens.”