Existing-home sales in the U.S. jumped in March to their highest annual rate in 18 months, according to the National Association of Realtors on Wednesday. Led by the Midwest, all major regions experienced strong sales gains in March and are above their year-over-year sales pace.
Total existing-home sales, which include single-family homes, townhomes, condominiums and co-ops, increased 6.1% to a seasonally adjusted annual rate of 5.19 million in March from 4.89 million in February, the highest annual rate since September 2013. The increase was well above a consensus estimate from economists.
Sales have increased year-over-year for six consecutive months and are now 10.4% above a year ago, the highest annual increase since August 2013 when it moved 10.7%. March's sales increase was also the largest monthly increase since December 2010.
Lawrence Yun, NAR chief economist, says the housing market appears to be off to an encouraging start this spring. "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."
Single-family home sales rose 5.5% to a seasonally adjusted annual rate of 4.59 million in March from 4.35 million in February, and are now 10.9% above the 4.14 million pace a year ago.
Existing condominium and co-op sales increased 11.1% to a seasonally adjusted annual rate of 600,000 units in March from 540,000 units in February, and are now 7.1% higher than March 2014 at 560,000 units.
March existing-home sales in the Northeast increased 6.9% to an annual rate of 620,000, 1.6% above a year ago, while in the Midwest, existing-home sales jumped 10.1% to an annual rate of 1.20 million in March, 12.1% above March 2014.
Existing-home sales in the South climbed 3.8% to an annual rate of 2.19 million in March, 11.7% above March 2014, while existing-home sales in the West rose 6.3% to an annual rate of 1.18 million in March, 11.3% above a year ago.
“Home sales have been bouncing around the 5 million unit pace for the past 12 months. After pushing above the 5 million unit threshold in June of last year, sales began to slow in November, dropping to an average 4.95 million unit pace,” says Lindsey Piegza, chief economist at the investment banking firm Sterne Agee. “The rise, however, does not yet suggest an upward trajectory from here. Consumers remain restrained in their spending patterns, not only in terms of non-essential goods but large ticket items as well. Underlying momentum in the demand for homes, new and existing, will reflect an increased ability to finance home purchases resulting from organic job and income growth.”