The U.S. housing market accelerated in March despite elevated mortgage rates reducing some of the affordability improvement the market had recently seen, according to a new report.
Zillow released its market report for March which found that newly pending home listings increased 4.6% from a year ago in March.
That increased the number of listings to the second-largest monthly total since the end of the pandemic boom in August 2022, which Zillow said was a positive sign for the market as the home shopping season begins in earnest.
The housing market’s uptick occurred despite mortgage rates increasing from 5.98% at the end of February to 6.38% in late March, according to data from Freddie Mac. Excluding taxes and insurance, the typical mortgage payment increased 1.5% from February, which undercut some of the affordability improvements the market had seen.
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Zillow found that the monthly mortgage payment on a typical U.S. home was $1,789 in March, given a 20% down payment, after excluding taxes and insurance. While that figure rose on a monthly basis, it was 4.4% lower than last year, according to the report.
There were 1.23 million homes listed for sale in March. Inventory rose 9.5% from February and active inventory was 4.2% higher than it was a year earlier.
The number of new for sale listings totaled 384,854 in March, an increase of 0.1% from a year ago and 35.6% in February.
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Newly pending listings – a figure that measures listings which changed from for sale to pending status rather than closed sales – shows 4.6% growth from a year earlier, and a 29.8% increase over February.
A total of 300,398 homes were sold in March, according to a preliminary reading from the Zillow sales count nowcast. That’s up 3.7% from a year ago and 25.2% from February, though those figures will be revised mid-month.
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“Buyers and sellers have been navigating uncertainty and market volatility in some form since the onset of the pandemic, and this month’s concern over energy prices is no different,” said Mischa Fisher, chief economist at Zillow. “However, we have persistent signals that the market has turned a corner.”
“Pent-up demand from three years of low sales volume and winter storms in January and February, along with the tailwind from lower mortgage rates earlier in the year, seem to have buoyed the market as home shopping season kicked off. In particular, the rapid acceleration of daily page views per listing we saw in March was a noteworthy improvement over the dormant market of recent years,” Fischer added.
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