US home sales remain strong, but lack of supply has slowed its roll

The market above $750K was particularly strong, with sales up 19%

Mar.March 22, 2018 09:21 AM
(Credit: Wikipedia)

The nation’s housing market stayed strong last month, with the only thing holding back sales being a lack of supply, according to a report by the National Association of Realtors.

The market for homes above $750,000 was especially strong, with sales up 19 percent compared to a year ago. That comes amid the new tax laws that cap mortgage tax deductions above $750,000, instead of the previous $1 million, according to CNBC.

Neither the lower cap, nor rising mortgage rates stopped many customers from signing on the dotted line, according to realtors polled by the association. Its figures are based on contracts signed between November and January, around the time that Congress debated and passed the new tax bill championed by President Trump.

But that could change. Last year, 2 million homes were sold between March and June, and the National Association of Realtors expects this spring’s sales to be flat.

Some potential buyers did hesitate to move into new homes for fear of losing the low mortgage interest rates they locked in for their existing home, experts said, But the likelihood of rate increases is also spurring others to lock in a lower rate now than they might be able to over the next few years.

The western U.S. saw sales jump 11 percent in February, compared to the same time in 2017. That’s despite the fact that it’s the most expensive market the country and only getting more expensive. The median home price across the six counties in Southern California rose 10.2 percent last month year-over-year to $506,750, according to CoreLogic Data gathered by the Los Angeles Times.

Above that, the market is a bit softer — prices in the ultra-luxury segment dipped in the fourth quarter of last year.

The only segments nationally that dipped wwe sales below $100,000, which were down 16.5 percent, along with overall sales in the Northeast. The supply shortage is the worst on the lower end of the market, as experts pinned a lack of activity in the Northeast on weather, according to CNBC. [CNBC] — Dennis Lynch

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