March Home Prices Post Biggest Increase in Four Years

Redfin, Seattle, said U.S. home prices increased at a nearly 9 percent annual rate in March, the highest price growth in four years.

The company’s monthly report said new listings declined 5.6 percent in March, a sign of possible waning seller enthusiasm and ongoing tight market conditions. The lack of homes for sale, down by 11.9 percent year over year, continued to constrain sales, which declined by 3.7 percent.

“The Easter holiday fell early this year, which may have played a role in the decline in new March listings,” said Redfin chief economist Nela Richardson. “Sellers are slow to list this year and we aren’t seeing enough new construction homes to fill the gap. If we don’t see the new listings number turn around next month or a pickup in new housing starts, inventory will be a persistent drag on sales for the remainder of the year.”

The report noted though seller enthusiasm is waning, buyer demand is strong, making for a highly competitive market. The typical home went under contract in 43 days, eight days faster than a year earlier and faster than any March on record. Among homes that sold last month, 23.9 percent sold above their list price, up from 22.3 percent last March. One in five (20.5%) homes that sold in March went under contract within two weeks of their debut, compared to 18.4 percent last year.

Redfin said Seattle was the fastest-moving market for the second month in a row, followed by Denver. Homes in these metros were on the market for a median of just seven days in March.

The report said strong price growth was not limited to hot coastal markets such as San Jose, Calif. (32.3%) and San Francisco (16.7%). Allentown, Pa. (21.8%), Detroit (20.6%) and Las Vegas (16.5%) also experienced strong price appreciation. No cities experienced price depreciation.

Inventory declined in 65 of the 73 most populous metros Redfin tracks in the full report. In 48 of those metros, inventory fell more than 10 percent compared to last year. Baton Rouge, Washington, D.C., and Allentown bucked the declining inventory trend, respectively adding 26.6 percent, 11.8 percent and 11.4 percent to housing supply from last year.