U.S. existing home sales dropped 8.5 percent sequentially to 5.27 million units in March. This was widely in line with the market consensus expectations of a fall of 9 percent. Single-family home and condo sales dropped on the month. Single-family homes dropped 8.9 percent to 4.74 million. In the meantime, sales in the smaller condo/co-op segment dropped 11.7 percent to 530k. Resale activity pulled back throughout the nation, but the fall was steepest in the West. Sales dropped 9.1 percent in the South, 7.1 percent in the Northeast and 3.1 percent in the Midwest.
The number of homes available for sale dropped 10.2 percent from a year earlier to 1.50 million units. At the current sales rate, unsold inventory sits at a 3.4 months of supply, up from 3 months in February but down from 3.8 months in March of last year. While sales dropped, price gains remained strong with the median existing home price rose 8 percent year-on-year in March.
“The supply of housing was a major constricting factor to higher sales until recently, but the pandemic has shifted the balance more firmly on the demand side. Some 22 million Americans – about 13 percent of the labor force – have applied for unemployment benefits in recent weeks, with that tally expected to increase further. As large swaths of the U.S. economy remain ground to a halt in light of measures to stem the spread of the virus, the housing market will continue to be pressured, with sales activity likely to head even lower in April”, said TD Economics in a research report.
