Existing-home sales basically held flat in March, and current home sales activity shows signs of underperforming by historical standards, according to the National Association of REALTORS®’ latest existing-home sales report. But NAR Chief Economist Lawrence Yun says the slow start to spring may be temporary, with an improvement for the housing market likely on the horizon.
Existing-home sales dropped slightly by 0.2 percent to a seasonally adjust annual rate of 4.59 million in March. They are 7.5 percent below the 4.96 million unit pace a year ago. The March sales volume was the slowest since July 2012, NAR notes.
“There really should be stronger levels of home sales, given our population growth,” Yun says. “In contrast, price growth is rising faster than historical norms because of inventory shortages.”
The median price for existing homes was $198,500 in March, up 7.9 percent compared to year-ago levels. “With rising home equity, we expect distressed homes to decline to a single-digit market share later this year,” Yun says. Distressed homes, which include foreclosures and short sales, accounted for 14 percent of sales in March, down from 21 percent in March 2013.
Yun says the housing market will likely see an increase in activity 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,” he says.
Northeast: Existing-home sales rose 9.1 percent in March, but remain 4.8 percent below year-ago levels. Median price: $244,700, up 3.2 percent from a year ago
Midwest: Existing-home sales rose 4 percent in March but are 10.3 percent below March 2013 levels. Median price: $149,600, 5.9 percent above year-ago levels
South: Existing-home sales fell 3 percent in March and are 3 percent below March 2013. Median price: $173,000, up 6.7 percent from a year ago.
West: Existing-home sales dropped 3.7 percent and are 13.4 percent below a year ago. Median price: $289,300, up 12.6 percent from March 2013