U.S. Existing Home Sales (March 2024)
Andrew Foran, Economist | 416-350-8927
Date Published: April 18, 2024
- Category:
- U.S.
- Data Commentary
- Real Estate
U.S. Existing Home Sales Take a Step Back in March
- Existing home sales fell by 4.3% month-on-month (m/m) to 4.19 million units (annualized) in March, coming in roughly in-line with the consensus forecast.
- Single-family home sales fell 4.3% to 3.80 million units in March, while sales in the smaller condo/co-op segment fell 4.9% to 390-thousand units.
- Activity was mixed on a regional basis, with sales rising in the Northeast (+4.2% m/m) and falling in the Midwest (-1.9% m/m), South (-5.9% m/m), and West (-8.2% m/m).
- Total housing inventory at the end of March was 1.11 million units, up 14.4% from a year ago. Measured at the current sales rate and seasonally adjusting, unsold inventory sat at 3.2 months' supply – up from 2.7 months in March 2023, but still tight on a historic basis.
- House prices were up 4.8% from a year ago, a deceleration from 5.6% (y/y) in the month prior. On a seasonally adjusted basis, the median home price fell 0.5% m/m, marking the largest monthly decline in over eighteen months (seasonal adjustment performed by TD Economics).
Key Implications
- The housing market moderated in March, but sales for the first quarter as a whole still rose 8.0% relative to the fourth quarter of last year, which was the largest quarterly increase since the third quarter of 2020. Granted, sales are rising from the subdued level of the prior year, but the fact that mortgage rates remained almost a full percentage-point below the peak seen late last year helped to nudge sales higher as well.
- However, we have seen U.S. Treasury yields climb higher in April due to persistent inflationary pressures, and this is beginning to flow through to mortgage rates. With market expectations for the first cut by the Federal Reserve now firmly set in the third quarter of this year, higher for longer interest rates are expected to remain a headwind for the housing market recovery over the coming months.
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