“A Good Garden May Have Some Weeds” -Thomas Fuller

As the housing market garden sprouted this spring, we saw some wonderful growth, along with what seemed like a few bothersome weeds. The growth came in the form of Existing Home Sales, up a solid 6.1% in March, to a 5.19 million annual rate. This was their highest level since September 2013. Plus, sales are up 10.4% versus a year ago, with the median home price up 7.8%. Significantly, non-cash sales, where the buyer uses a mortgage loan, are up 25.3% from a year ago. In addition, the existing homes inventory shot up by 100,000 in March, the biggest increase for any March since 2006. But the months’ supply dipped to 4.6, thanks to the faster sales pace.

The weeds in our garden appeared as New Home Sales, which were down 11.4% in March, dropping to a 481,000 annual rate. But if we pick through the undergrowth, we find that new home sales are still up a robust 19.4% versus a year ago. Even with the March dip, the upward trend in new home sales remains, thanks to the boom we enjoyed in February. And single family housing starts have picked up, so builders clearly expect this trend to continue. The new home inventory is still quite low, although March did see a gain of 4,000 units. Finally, the FHFA price index of homes financed with conforming mortgages was up 0.7% in February and is up 5.4% over a year ago.