March 2024 Residential Sales, Inventory and Prices

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Sales of new single-family houses in March 2024 were at a seasonally adjusted annual rate (SAAR) of 693,000 units (670,000 expected). This is 8.8% (±17.2%)* above the revised February rate of 637,000 (originally 662,000 units) and 8.3% (±19.5%)* above the March 2023 SAAR of 640,000 units; the not-seasonally adjusted (NSA) year-over-year comparison (shown in the table above) was +8.1%. For longer-term perspectives, NSA sales were 50.1% below the “housing bubble” peak but 28.2% above the pre-2000 average.

The median sales price of new houses sold in March was $430,700 (+6.0% MoM, or $24,200). The average sales price was $524,800 (+7.4%, or $36,200). Homes priced at/above $750,000 comprised 13.4% of sales, up from the year-earlier 11.3%.

* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.

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As mentioned in our post about housing permits, starts and completions in March, single-unit completions fell by 111,000 units (-10.5%). Sales rose (56,000 units, or +8.8%), but inventory for sale expanded in absolute terms (+12,000 units) while shrinking in months-of-inventory terms (0.5 month). 

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Existing home sales sank (190,000 units or -4.3%) in March to a SAAR of 4.19 million units (4.18 million expected). The inventory of existing homes for sale expanded in both absolute (+50,000 units) and months-of-inventory (+0.3 month) terms. Because new sales advanced while resales retreated, the share of total sales comprised of new homes increased to 14.2%. The median price of previously owned homes sold in March jumped to $393,500 (+2.5% or $9.700).

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Housing affordability dropped by 2.7 percentage points as the median price of existing homes for sale in February climbed $5,800 (+1.5% MoM; +5.6% YoY) to $383,500. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller CoreLogic Home Price indices rose by a not-seasonally adjusted monthly change of +0.6% (+6.4% YoY).

“Following last year’s decline, U.S. home prices are at or near all-time highs,” said Brian Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices. “Our National Composite rose by 6.4% in February, the fastest annual rate since November 2022. Our 10- and 20-City Composite indices are currently at all-time highs. For the third consecutive month, all cities reported increases in annual prices, with four currently at all-time highs: San Diego, Los Angeles, Washington, D.C., and New York. On a seasonally adjusted basis, our National, 10- and 20- City Composite indices continue to break through previous all-time highs set last year.”

“Since the previous peak in prices in 2022, this marks the second time home prices have pushed higher in the face of economic uncertainty. The first decline followed the start of the Federal Reserve’s hiking cycle. The second decline followed the peak in average mortgage rates last October. Enthusiasm for potential Fed cuts and lower mortgage rates appears to have supported buyer behavior, driving the 10- and 20- City Composites to new highs.”

“The Northeast region, which includes Boston, New York, and Washington, D.C., ranks as the best performing market for over the last half year. As remote work benefited smaller (and sunnier markets) in the first part of the decade, return to office may be contributing to outperformance in larger metropolitan markets in the Northeast,” according to Luke.

“San Diego has been the best performing market following the trough in home prices observed in early 2023. With Los Angeles rising for 13 consecutive months to record another new high, Southern California has outperformed its surrounding neighbors. San Francisco has dropped 12% since its peak, while Phoenix and Las Vegas have dropped 6% and 4.5%, respectively.”

“With all markets increasing on an annual basis, similar performance was observed in the monthly return data. Eighteen markets experienced uplift in February. Tampa experienced a decline of 0.3% while Seattle has the largest monthly gain of 2.3%.”

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The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.