US Existing-Home Sales Fall Over 3%, Prices Hit A Record High of $329,000

The number of U.S. existing-home sales is falling, but it’s definitely not a drag on price growth. The National Association of Realtors (NAR) data shows existing-home sales fell in March. The drop in sales is largely attributed to falling inventory. This has created more pressure on home prices, driving them to new record highs.

U.S. Existing-Home Sales Fall 3.7% In March

U.S. existing-home sales made a slight dip, but came in much higher than they were this time last year. NAR reported 6.01 million existing-home sales when seasonally adjusted at the annual rate (SAAR) for March, down 3.7% from a month before. This is a huge 12.3% higher than the same month last year. Mixed directions, I know. Let’s unpack it. 

U.S. Existing-Home Sales

U.S. existing-home sales seasonally adjusted at the annual rate (SAAR).
Source: NAR; Better Dwelling.

Monthly growth is likely telling us more than annual growth, due to the base effect. Last March, U.S. existing-home sales made an abrupt fall of 8.5% from the month before. The drop was entirely due to restricted movement at the onset of the pandemic. This made March 2020 sales the lowest since April 2019. The base effect makes a small dip last month, look like a huge annual jump. Typically we see February to March sales rise, not fall.

U.S. Home Prices Hit A New Record High

U.S. home prices on the other hand are chugging higher, as more expensive homes make up more sales. Existing homes had a median sale price of $329,100 in March, up 6.9% from the month before. Compared to the same month a year before, this is a record-smashing 17.2% higher. This marks the 109th month of annual home price growth in positive territory. Home prices are at an all-time high, the rate of growth is at an all-time high, and the length of price growth without a correction, is the longest ever. 

U.S. Existing-Home Median Sales Price

The median unadjusted sale price for homes across the U.S.
Source: NAR; Better Dwelling.

The two big trends driving both of these numbers are a shortage of inventory and mortgage rates. Mortgage rates are lower than last year, giving people much more room to absorb higher prices. A shortage of inventory tends to cause more competition for the same homes.

That also impacts home sales, since you can’t really buy as many homes if there are fewer on the market. While mortgage rates are lower than last year, they’ve still climbed a lot since January. This makes it a little more difficult for borrowers to find the budgets to absorb prices, even though it’s better than last year. Rising mortgage rates are likely to produce a further drag on home price growth as they rise further.

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  • RW 3 years ago

    In before Canadians start commenting, but you don’t have to pay for a $30 doctor visit, so it’s worth it. Or in an emergency, you’ll save $250k, so that’s why you pay $1 million extra.

    • A Literate Canadian 3 years ago

      An education system that teaches literacy is priceless.

    • BoBnUSA 3 years ago

      you know most people have employer paid health insurance in the US and many make so much more than in Canada?

      Canadians have an inflated sense of themselves which is in part driving house prices, you think you are the most desirable country in the world just because some business journal produces a best list

      Canada is a step up for an immigrant from Bombay or Syria or the Philipines, not so much for anyone else

      truth is Canada is so mediocre

      • Kris 3 years ago

        Hey Bob,
        Canada is a lot better than some of the states within your union; especially the blue states. We don’t have the social unrest, looney media, riots and looting, racial tensions, and all that other wacky crap happening in places like Portland etc… Although, Texas seems like an amazing place to live. It’s practically it’s own country with the 9th largest economy in the world. And you know what the funny thing is? The Texas senator, Ted Cruz, is Canadian! Born in Calgary Alberta.

  • D 3 years ago

    If you took the time to count America’s broad money supply you’d get a number of over $200 trillion. That’s not including the more than $200 trillion unfunded liabilities and over $40 trillion fabricated dollars in unaccounted for transactions by the DOD, roughly $2-3 trillion a year. Add that all up and to be square with the money supply an American household (3 persons) needs to have a networth over $5 million to be safe.

    It’s the same in Canada. Remember that most money is debt, in fact it’s all debt and credits and most of that “””money””” is created by commercial banks!

    • Credit Guy 3 years ago

      Do you leave a bad take about the money supply every day? Because it’s real dedication.

      Monetary expansion and home price expansion aren’t the same thing. Credit expansion happens as a result of home price expansion, because like you just pointed out — the money is created by the commercial bank when they buy a home.

      • D 3 years ago

        > Monetary expansion and home price expansion aren’t the same thing.
        Did I say that? And one clearly leads to the other.

  • Smug Canadians 3 years ago

    RW – I realize you’re being facetious but it’s only 5-7% of Americans that don’t have coverage and would have to worry about this. The two issues have nothing to do with each other.

  • Paul c 3 years ago

    It’s going up forever, Laura, just like Bitcoin

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