Existing-home sales were essentially flat in March, while the growth in home prices moderated, according to the National Association of Realtors. Sales gains in the Northeast and Midwest were offset by declines in the West and South.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, slipped .2% to a seasonally adjusted annual rate of 4.59 million in March from 4.60 million in February, and are 7.5% below the 4.96 million-unit pace in March 2013. Last month’s sales volume remained the slowest since July 2012, when it was 4.59 million.
Lawrence Yun, NAR chief economist, said that current sales activity is underperforming by historical standards. “There really should be stronger levels of home sales given our population growth,” he said. “In contrast, price growth is rising faster than historical norms because of inventory shortages.”
Yun expects some improvement in the months ahead. “With ongoing job creation and some weather delayed shopping activity, home sales should pick up, especially if inventory continues to improve and mortgage interest rates rise only modestly.”
The median existing-home price for all housing types in March was $198,500, up 7.9% from March 2013. Distressed homes – foreclosures and short sales – accounted for 14% of March sales, down from 16% in February and 21% in March 2013. “With rising home equity, we expect distressed homes to decline to a single-digit market share later this year,” Yun said.
Ten percent of March sales were foreclosures, and 4% were short sales. Foreclosures sold for an average discount of 18 percent below market value in March, while short sales were discounted 12%.
Total housing inventory at the end of March rose 4.7% to 1.99 million existing homes available for sale, which represents a 5.2-month supply at the current sales pace, up from 5.0 months in February. Unsold inventory is 3.1% above a year ago, when there was a 4.7-month supply.
The median time on market for all homes was 55 days in March, down from 62 days in February, and also 62 days on market in March 2013. Short sales were on the market for a median of 112 days in March, while foreclosures typically sold in 55 days and non-distressed homes took 53 days. Thirty-seven percent of homes sold in March were on the market for less than a month.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.34% in March from 4.30% in February; the rate was 3.57% in March 2013.
First-time buyers accounted for 30% of purchases in March, up from 28% in February; they were 30% in March 2013.
Steve Brown, NAR president and co-owner of Irongate Realtors in Dayton, Ohio, said first-time buyers have been stuck in a rut. “There are indications that the stringent mortgage underwriting standards are beginning to ease a bit, particularly regarding credit score requirements, but they remain a headwind for entry-level and single-income home buyers,” he said.
“We also have tight inventory in the lower price ranges where many starter homes are found, but rising new-home construction means some owners will be trading up and more existing homes will be added to the inventory. Hopefully, this will create more opportunities for first-time buyers,” Brown said.
All-cash sales comprised 33% of transactions in March, compared with 35% in February and 30% in March 2013. Individual investors, who account for many cash sales, purchased 17% of homes in March, down from 21% in February and 19% in March 2013. Seventy-one percent of investors paid cash in March.
Single-family home sales were unchanged at a seasonally adjusted annual rate of 4.04 million in March, the same as February, but are 7.3% below the 4.36 million pace a year ago. The median existing single-family home price was $198,200 in March, which is 7.4% above March 2013.
Existing condominium and co-op sales declined 1.8% to an annual rate of 550,000 units in March from 560,000 in February, and are 8.3% below the 600,000 level in March 2013. The median existing condo price was $200,800 in March, up 11.6% from a year ago.
Regionally, existing-home sales in the Northeast rose 9.1% to an annual rate of 600,000 in March, but are 4.8% below March 2013. The median price in the Northeast was $244,700, up 3.2% from a year ago.
Existing-home sales in the Midwest rose 4% in March to a pace of 1.04 million, but are 10.3% below a year ago. The median price in the Midwest was $149,600, which is 5.9% above March 2013.
In the South, existing-home sales declined 3% to an annual level of 1.92 million in March, and also are 3% below March 2013. The median price in the South was $173,000, up 6.7% from a year ago.
Existing-home sales in the West fell 3.7% to a pace of 1.03 million in March, and are 13.4% below a year ago. The median price in the West was $289,300, which is 12.6 percent higher than March 2013.
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