March home sales dropped despite a surge in supply: Here's what you need to know

All right. Home sales dropped last month despite a surge in supply. And Diana Olek is here with the very latest. Hi Dye. Hey Ty. Yeah, the added supply just couldn’t counter the higher mortgage rates. As a result, existing home sales fell 4.3% in March compared with February sales, down 3.7% year over year. Now these sales are based on closing, so contract signed in January and February. Mortgage rates stayed lower in January and then shot higher in February. Now they’re even higher, hovering around 7.5%. Inventory did improve slightly, up 4.7% month to month to 1.11 million homes for sale at the end of March. That’s a 3.2 month. Supply 6 is considered balance between buyer and seller. Now inventory is about 14% higher than March of last year. But more supply is not really helping cool prices. The median price of an existing home sold in March was $393,500, up 4.8% from the year before. It’s also the highest price ever for the month of March. The market is moving faster with the typical home sitting on just for about 30-3 days compared with 38 days in February. Investors pulled back a bit, making up 15% of sales compared with 21% in February and 17% in March of last year. And first time buyers did make a comeback though 32% of sales, up from 26% in February and 28% the year before. Interesting though on the price tier, sales rose sharply for homes priced above $750,000 and especially above 1,000,000. There is simply more supply on the high end and higher tier buyers aren’t as affected by slight shifts in mortgage rates and a lot of them also use cash, Tyler. So prices are up in the most recent month. I’m looking 4.8% year over year sales a little bit off. Why have have have housing sales and prices been able to hold up as well as they have given those higher mortgage rates? Well, the prices, that’s an easy one. That’s because they’re simply still very little supply. Yes, we said supply increased to 3.2, but again six months 6 twice as much as we have now is considered a balanced market. So when you still have demand and so little supply, prices have nowhere to go but up. As for sales, the Realtors are characterizing this as sales are kind of stuck in this narrow range right now, which are really actually pretty low. And that’s because mortgage rates are significantly higher and prices are higher. So you’re just the affordability level is just out of hand, especially for first time buyers. They did come back a little bit. We’ve seen more action on the FHA mortgage rates because they can get in with less money. But again, it’s still coming off very, very low volume. So even the move up isn’t really that much. All right, Diana, Ole, thank you very much.