– Existing home sales in the US moderated to 4.92 million annualized units in March 2013 from February’s revised 4.95 million sales (initially reported as 4.98 million). Market expectations had been for sales totalling 5.0 million annualized units.
– The inventory of homes available for sale increased by 1.6% to 1.93 million units, which combined with moderation in sales resulted in the month’s supply of unsold homes rising to 4.7 from 4.6 in the previous month. Despite the increase in the month, housing inventories remained considerably tight and are restraining the level of activity.
– The median price of existing homes increased 11.8% on a year-over-year basis as the share of distressed property sales declined from a year ago. This represents the largest 12-month increase in home prices since November 2005.
– The US housing market has seen steady improvements in the last year and a half, and the 4.94 million annualized existing home sales recorded in the first quarter of 2013 represented an annualized 3.3% increase compared to the previous quarter and marked the highest quarterly level of existing home sales since the fourth quarter of 2009. Moreover, as was highlighted in last week’s Beige Book report and reiterated in the report accompanying today’s data release, resale activity has been restrained by limited availability of homes for sale in some regions. This is supportive of a further increase in new home construction, which in turn suggests that the residential investment component of real GDP should continue to see solid growth and to help support the ongoing expansion of the overall economy during the year.
An annualized 4.92 million existing homes were sold in the US in March 2013, which was a 0.6% decrease from the revised 4.95 million annualized units sold in February (initially reported as 4.98 million) and below the 5.0 million sales that the market had expected. The moderation in resale activity in March reflected a pullback in sales of condos and co-ops, which declined by 3.2% to 0.60 million annualized units. Sales of single-family homes decreased in the month as well, although by a modest 0.2% to 4.32 million annualized units. Existing home sales declined in the West (-1.7%) and South (-1.5%), while they increased in the Midwest (1.8%) and held steady in the Northeast.
The absolute number of existing homes available for sale increased by 1.6% to 1.93 million units in March. At the current pace of sales, it would take 4.7 months to clear this inventory of unsold homes, which is up from 4.6 in the previous month, but well below the historical average of 6.4 months and indicative of tight supply conditions in the housing market. Against these limited inventories and with distressed sales making up a smaller share of the market (down to 21% of total sales in March from 25% in February and 29% in March 2012), house prices continue to their upward trend. The US$184,300 median sales price represented an 11.8% increase over the year-ago level and marked the largest year-over-year price increase since November 2005.
After struggling to gain traction in the aftermath of the economic downturn, the US housing market has seen steady improvements in the last year and a half, and the 4.94 million annualized existing home sales recorded in the first quarter of 2013 represented an annualized 3.3% increase over the previous quarter and marked the highest quarterly level of existing home sales since the fourth quarter of 2009. Moreover, as was highlighted in last week’s Beige Book report and reiterated in the report accompanying today’s data release, resale activity has been restrained due to a lack of homes available for sale in some regions. This is supportive of a further increase in new home construction, which in turn suggests that the residential investment component of real GDP should continue to see solid growth and to help support the ongoing expansion of the overall economy during the year.
RBC