March Sales' 'Disconcerting Dynamic'

Existing-home sales were lower than experts anticipated in March, with distinct pressures on both the high- and low-ends of the market, according to the latest data from the National Association of Realtors.

Sales of existing homes priced below $100,000 fell 13 percent annually in March, with exceedingly tight supply, while sales of homes worth $1 million or more were down 11 percent, despite rising inventory. Jessica Lautz, vice president of research at the NAR, tells CNBC that high-end pressures come down to the change in state and local tax deductions (SALT), “We just filed our taxes, and I think everyone is nervous about what’s happening right now with SALT,” adding, “We are just going to have to wait and see how much of an impact that is going to have to the high end of the market.”

The inventory of cheaper homes continues to drop for two reasons: builders are not focused on the sector and investors snapped up lower-end homes during the last housing crisis, turning them into rentals. About 5 million homes were added to the rental stock and very few of them were replaced in the for-sale market.

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