Rising Prices, Low Inventory, More Multifamily Construction in March

Last month, the median price for homes sold had the largest annual gain in four years. According to Redfin data, the price of a median home sold went up 8.9 percent year-over-year to $297,000.

Home prices are being driven up by low supply, and relief does not appear to be coming from new single-family home construction. In March, single-family housing starts fell 3.7 percent, and building permits dropped 5.5 percent. On the other hand, multifamily construction is surging. Tendayi Kapfidze, chief economist at LendingTree, says, "The change towards multifamily could be the initial signs that affordability is starting to impact the mix of construction. Multifamily units are at lower price points and include significant rental units," CNBC reports. 

The supply of homes for sale was down 11.9 percent in March, compared with a year ago. As a result, sales fell 3.7 percent. The number of new listings in March dropped 5.6 percent annually, although part of that may have been due to the Easter holiday falling early this year. Said Redfin's chief economist, Nela Richardson, "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."

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