Housing Activity Uptick in March

Housing activity during March perked up with the arrival of spring, according to the latest report from Northwest Multiple Listing Service. Listings, sales and prices all outgained the previous month and the same month a year ago.

Brokers suggested more favorable conditions await would-be buyers, with prices rising more slowly, mortgage rates stabilizing, sellers willing to make concessions, and a growing selection of listings.

“Over the last month, the 30-year fixed-rate has settled in, making only slight moves in either direction,” said Freddie Mac Chief Economist Sam Khater. “This stability is reassuring, and borrowers have responded with purchase application demand rising to the highest growth rate since late last year,” he added.

The 30-year fixed-rate mortgage averaged 6.64% as of April 3, marking the tenth consecutive week of rates remaining under 7%.

Selma Hepp, chief economist at Cotality (formerly CoreLogic) also commented on mortgage rates, saying easing them “has helped bring some home buyers off the sidelines.” Nonetheless, she expects buying activity to remain “muted amid a lot of economic and policy uncertainty and fears of future job losses.”

Northwest MLS brokers reported 11,640 active listings at the end of March—up more than 39% from a year ago. King County’s listings of single-family homes and condominiums surged nearly 60%, rising from 2,316 to 3,700. In Kittitas County, the year-over-year inventory increased more than 48% (from 178 available properties to 264).

Of the total active listings at the end of March, 9,161 were added during the month, up from February’s total of 6,346. In King County, 3,408 new listings were added during March. Brokers in Kittitas County added 138 new listings last month.

Figures from Northwest MLS indicate the number of showings scheduled through MLS-provided software increased 4.3% when compared to February but were down from twelve months ago. A comparison with year-ago data shows keybox access decreased nearly 19%.

Despite improving inventory, supply remains tight in many areas.

Five of the 26 counties in the NWMLS report had less than two months of inventory, including King County with 1.86 months. Kittitas County, with 5.1 months of inventory, was among six counties with more than five months of supply. Across all counties, there was 2.15 months of inventory at the end of March.

Brokers also notched area-wide gains in pending sales (up 5.2%), although there was considerable variation among the counties, ranging from a 100% decline to a gain of more than 39%. King County’s figure was about 4%, while Kittitas County registered a gain of 18.1%.

Eleven counties reported double-digit increases in pending sales compared to 12 months ago, but nine counties had decreases.

The MLS report showed a 4.67% increase in closed sales, rising from the year-ago total of 5,165 to 5,406, with 15 counties experiencing YOY gains, including King County where the number of completed transactions rose nearly 5.8%. Kittitas County reported a slight decline (down 1.89%).

The overall median price for last month’s closed sales was $649,999, up about 2.6% from a year ago.  San Juan County had the highest median price at $870,000, followed by King ($855,000) and Snohomish ($755,000).  Homes that sold in Kittitas County during March had a median price of $469,450, down nearly 14.7% from the year ago figure of $550,000.

“Rising median house prices continue to exacerbate affordability issues,” said Steven Bourassa, director of the Washington Center for Real Estate Research (WCRER). “In the first quarter of the year, median sale prices increased by 9.5%, which would translate into nearly 44% if compounded over the course of a year.”

Condo prices YOY surged 5%, while prices for single family homes rose at a more moderate rate of about 1.7%.

Fannie Mae Senior Vice President and Chief Economist Mark Palim said the recent pullback in mortgage rates “will provide a small boost to home sales this year,” noting interest rates have been the most important driver of home sales. “We think mortgage rates will move even lower within the next quarter and ultimately close the year at approximately 6.3%, which could be low enough to generate some extra sales from any would-be buyers still waiting on the sidelines.”