March witnessed a notable decline in existing-home sales in the South, falling by 5.8% as mortgage rates continued to escalate. This trend reflects a broader national downturn, though there are unique regional impacts and economic conditions to consider.
In the South, existing-home sales decreased to an annual rate of 1.9 million, marking a 5.9% drop from February, though still showing a slight improvement from January’s figures of 1.84 million. This indicates a decrease of 5.0% on a year-over-year basis. Despite this slowdown in sales, there is a silver lining with the median home price rising to $359,100, which is a 1.4% increase from February and a 3.4% rise compared to the same period last year.
The decrease in home sales is largely a national phenomenon, with three of the four U.S. regions experiencing declines. The West and Midwest saw reductions in home sales of 8.2% and 1.9%, respectively. Contrarily, the Northeast was the only region with positive performance, as sales there increased by 4.2% after four months of no growth.
A noteworthy national trend in March was the significant presence of first-time home buyers, who were responsible for 32% of the total sales. This marks an increase from 26% in February and 28% in March of the previous year. This uptick indicates a growing segment of new entrants who are navigating the challenging market conditions more successfully.
Lawrence Yun, the Chief Economist at the National Association of Realtors (NAR), pointed out that the recovery in home sales is hampered by stable, yet high interest rates. “Though rebounding from cyclical lows, home sales are stuck because interest rates have not made any major moves,” explained Yun. He also noted the robust job market as a potential catalyst for housing demand. There are nearly six million more jobs now compared to pre-COVID levels, suggesting an increase in potential home buyers.