Please ensure Javascript is enabled for purposes of website accessibility

YOY Jump in Home Prices at 8-Year High

By Justin Loiseau - Apr 22, 2013 at 3:28PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Sales of existing homes dip from February to March.

Sales of existing homes fell 0.6% in March to a seasonally adjusted annual rate of 4.92 million, according to a National Association of Realtors (NAR) report released today.

After rising 0.8% for February, analysts had predicted another 1% bump.

At the same time, squeezed inventory is pushing housing prices higher. The March median price for an existing home was $184,300, 11.8% above March 2012's price tag. The newest numbers mark the 13th straight month of year-over-year price increases, and March's YOY price jump is the largest since November 2005.

NAR Chief Economist Lawrence Yun reiterated his supply worries in a statement today:

Buyer traffic is 25 percent above a year ago when we were already seeing notable gains in shopping activity. In the same timeframe housing inventories have trended much lower, which is continuing to pressure home prices. The good news is home construction is rising and low mortgage rates are continuing to keep affordability conditions at historically favorable levels. The bad news is that underwriting standards remain excessively tight, while renters are getting squeezed by higher rents.

The median time on market for existing homes was 62 days in March, down from the previous month's 74 and a whopping 32% below last March's average of 91 days. Current inventories bumped up 1.6% to 1.93 million existing homes, equivalent to a 4.7-month supply at current sales rates.

According to Yun, the inventory gains are largely seasonal and the market still "broadly favors sellers." Looking ahead, Yun estimates that housing inventories will need to expand to a six-month supply for buyers and sellers to create a more stable market.

link

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/21/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.