While the total number of units selling is down slightly (due to limited inventory), the median home price set a new all time record for a March reading. According to the National Association of Realtors Existing Home Sales report, the median price for a home moved upward to $259,400 which is up from March 2018 ($249,800). March’s price increase marks the 85th straight month of year-over-year gains.
Total housing inventory at the end of March increased to 1.68 million units, up from 1.63 million existing homes available for sale in February and a 2.4% increase from 1.64 million a year ago. Unsold inventory is at a 3.9-month supply at the current sales pace, up from 3.6 months in February and up from 3.6 months in March 2018.
“Further increases in inventory are highly desirable to keep home prices in check,” says Lawrence Yun, NAR's Chief Economist. “The sustained steady gains in home sales can occur when home price appreciation grows at roughly the same pace as wage growth.”
Properties remained on the market for an average of 36 days in March, down from 44 days in February but up from 30 days a year ago. Forty-seven percent of homes sold in March were on the market for less than a month.
First-time buyers were responsible for 33% of sales in March, up from last month and a year ago (32% and 30%). All-cash sales accounted for 21% of transactions in March, down from February’s 23%, but up from a year ago (20%). Individual investors, who account for many cash sales, purchased 18% of homes in March, up from February’s 16%, and up from a year ago (16%).
Distressed sales – foreclosures and short sales – represented 3% of sales in March, down from 4% last month and down from 4% in March 2018. One percent of March 2019 sales were short sales.
What Happened to Rates Last Week?
Mortgage backed securities (FNMA 4.00 MBS) lost just -5 basis points (BPS) from last Friday's close which caused fixed mortgage rates to move sideways compared to the previous week.
Overview: We had a holiday shortened week with the bond market closing at 2:00 Eastern on Thursday. We got some fairly good economic data with strong Retail Sales and yet another strong jobs report. The Fed's Beige Book received the most attention but it really offered no surprises.
The Talking Fed: We got to take a look at the latest Beige book prepared by the Fed in advance of their next policy meeting.You can read the official release here.
Here are some key highlights:
- On Labor: "employment continued to increase nationwide, with nine districts reporting modest or moderate growth" even as the other three reporting slight growth. Furthermore, a majority of districts cited shortages of skilled laborers, most commonly in manufacturing and construction, while wages for both skilled and unskilled positions generally grew at about the same pace as earlier this year.
- On Manufacturing: Contacts in many districts reported that trade-related uncertainty was weighing on activity.
- On Inflation: On balance, prices have risen modestly since the previous report. Input costs increased in the modest-to-moderate range. Tariffs, freight costs, and rising wages were often cited as key factors driving this trend.
- Economic Activity: Similar to the last report, most First District business contacts cited modest to moderate growth, with some slowing in manufacturing.
- Retail Spending: All retail contacts for this round, covering late February through early April, reported that same-store sales grew by low- to mid-single digits on a year-over-year basis, indicating that "consumers were in a buying mood."
Retail Sales: The March data was much stronger than expected. The headline reading hit 1.6% vs est of 0.9%. Ex-Autos, another beat with a 1.2% vs est 0.7% expectation. Plus February was revised upward from -0.4% to -0.2%.
Jobs, Jobs, Jobs: For the second straight week, we got a sub-200K reading in Initial Weekly Jobless Claims (192K vs est of 205K). The more closely watched 4 week moving average dropped down to 201,250 with is the lowest since 1969.
Philly Fed: Their Business Outlook Survey for April was a little lighter than expected but still in positive territory (8.5 vs est of 10.2)
Business Inventories: The February data was better than expected (lower number is better) 0.3% vs est of 0.4%.
Leading Indicators: The March Leading Economic Indicators were a little better than expected (0.4% vs est of 0.3%