Home prices hit a new record in March as houses spent less time on the market than ever before, but sales actually slowed due to the small number of properties available, according to a report released Thursday.
The median price for an existing home rose to $329,100 in March, up 5.9% from February and a record high, while properties on the market sold in 18 days on average, a record low. Meanwhile, sales of existing homes fell 3.7% from February to a seasonally adjusted rate of 6.01 million per year, the National Association of Realtors said in a monthly report. The rising prices are a classic result of supply and demand, with buyers continuing to chase a severely depleted number of homes for sale. The existing inventory would be gone in 2.1 months at the current rate, close to a record low.
"The sales for March would have been measurably higher, had there been more inventory," said NAR Chief Economist Lawrence Yun in a statement. "Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising."
Mortgage interest rates—which had been rising in February and March—also may have hurt sales last month, Yun said. Those rates, which hit a record average low of 2.66% for a 30-year fixed loan in December, as measured by Freddie Mac, had been helping fuel a home sales boom during the pandemic. Borrowing costs have been falling again in April and average 30-year fixed rates were back down to 2.97% as of Thursday, below 3% for the first time since February.