March Madness Hits Housing Market
March housing data had its share of ups and downs.
Inclement weather in the Midwest and Northeast sent a chill in residential new home construction after the unseasonably warm weather in February. The Commerce Department reported that Housing Starts in March fell nearly 7 percent from February to an annual rate of 1.215 million annualized units, below the 1.256 million expected. February's reading was revised higher. From March 2016 to March 2017, Housing Starts were up 9 percent.
Hopefully, spring weather will hold for future construction, as Building Permits in March were up 3.6 percent from the revised February reading and 17 percent above March 2016.
Builder confidence remained solid in April, though it did fall three points to a level of 68 on the National Association of Home Builders/Wells Fargo Housing Market Index. The index gauges builder perceptions of current single-family home sales, sales expectations for the next six months and traffic of prospective buyers. Readings over 50 indicate positive sentiment.
Existing Home Sales hit their highest pace in over 10 years in March, according to the National Association of REALTORS® (NAR), with sales climbing 4.4 percent from February to a seasonally-adjusted annual rate of 5.71 million. March's sales pace is 5.9 percent above a year ago and surpasses January as the strongest month of sales since February 2007.
However, demand continues to outweigh supply with inventories down 6.6 percent from a year ago. Finding a home, "continues to be a strenuous task for many buyers," said Lawrence Yun, NAR chief economist. An increase in listings helped fuel the March surge. "Sales will go up as long as inventory does," he said in a statement.
In economic news, slowing job growth and retail sales, lower manufacturing numbers and a decline in consumer inflation in March led to lower economic growth. A silver lining is that those factors helped keep home loan rates near historic lows.
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