The relentless climb in U.S. home prices and tightening supply threaten to cool the hottest housing market in 15 years, sending frustrated home buyers to the sidelines, latest figures have showed.
The median price for existing home sales rose to 329,100 U.S. dollars in March, a new high according to the National Association of Realtors (NAR). Prices soared 17.2 percent last month from a year earlier, marking the biggest price increase in NAR data going back to 1999.
"Steepening prices, combined with a scarcity of inventory that has left the U.S. housing market millions of homes short of buyer demand, have taken some steam out of the market at the start of the peak spring selling season," reported The Wall Street Journal on Friday.
NAR said that existing-home sales dropped 3.7 percent in March from February, the second straight month of sales declines.
The supply constraints are creating a fiercely competitive bidding climate where homes are sitting on the market for shorter periods than ever before. The typical home that sold in March spent only 18 days on the market, the fastest pace on record, NAR said.
"The softening sales activity is not due to demand going away. Demand remains strong," Lawrence Yun, NAR's chief economist, was quoted by the Journal as saying. "It is the lack of inventory that is hindering the sales activity."
Spring is when many families try to buy homes so they can move before the start of a new school year, one reason it is the busiest time of year. Some real-estate executives say inventory is likely to increase in the coming months, as sellers try to take advantage of seasonal activity. Increased vaccination rates could also make sellers feel more comfortable about the potential risk of letting strangers tour their homes.
Supply did edge up in March to 1.07 million homes for sale, which was 3.9 percent higher than in February. But that amount was 28.2 percent lower than what was available in March 2020. At the current sales pace, there was a 2.1-month supply of homes on the market at the end of March.
