Home sales in the United States declined in March for the second consecutive month as the price tag of homes increased by about 15 percent from a year ago, according to a report from the National Association of Realtors.
Sales of homes in all regions of the U.S. stayed steady or dropped from the previous month and from a year ago, according to the group.
Monthly sales declined the most in the Midwest, dropping 4.5 percent from February and 3.1 percent from March 2021. Existing home sales in the South declined by 3 percent from February and March 2021, while sales in the Northeast dipped 2.9 percent from February and 11.8 percent on last year.
Sales in the West held steady from February, but also dropped 4.7 percent from March 2021.
Although sales of homes declined in most regions, the median prices of existing homes in the U.S. have soared by 15 percent from a year ago, reaching a price of $375,300 in March 2022, up from $326,300 in March 2021, according to the National Association of Realtors.
The South had the biggest jump in prices, with the median rising 21.2 percent since March 2021. The median price in the Northeast rose by 6.8 percent from last year, and prices in the Midwest and West jumped 10.4 percent and 5.4 percent, respectively.
Prices have increased for 21 consecutive months of year-over-year comparisons, the longest streak in history, according to the report.
Properties remained on the market for 17 days on average in March 2022, one day less than February 2022 and March 2021. Eighty-seven percent of houses sold in March were on the market for less than a month, according to the report.
First time buyers constituted 30 percent of home sales in March, down from 32 percent in March 2021 and up from 29 percent in February. Foreclosures and short sales represented less than 1 percent of sales, equal to these sales in February and March 2021.
A recent poll by Fannie Mae, a government-backed company that buys mortgages from lenders, found that a record low of 25 percent of respondents said that now is a good time to buy a home.
National Association of Realtors chief economist Dr. Lawrence Yun said higher home prices and rising interest rates have shrunk the pool of people who can afford to buy homes.
“Higher prices and higher mortgage rates have boosted the required monthly payment to buy a home; it’s up by more than 40 percent from a year ago. This affordability challenge will shrink the buyer pool.” Yun wrote to The Hill.
Cash buyers of homes are unaffected and constitute a minority of sales, according to Yun.
Cash sales of homes accounted for 28 percent of transactions, up from 25 percent in the previous month and 23 percent from last year, according to the report.
However, Yun said after a two-year surge in sales, home sales are expected to reach back to pre-pandemic levels.
“Home prices are on firm ground from the ongoing housing shortage and from non-existent subprime lending. Home price growth will slow to around 5 percent by the end of the year,” Yun wrote.