National housing market update: Existing-home sales decreased in March, but continued to outperform last year’s levels. Inventory tightened and home prices showed further signs of stabilizing, according to the National Association of REALTORS®.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, declined 2.6% but are still 5.2% above the pace in March 2011.
Lawrence Yun, NAR chief economist, said the national housing market recovery is in the process of settling into a higher level of home sales. “The recovery is happening though not at a breakout pace, but we have seen nine consecutive months of year-over-year sales increases,” he said. “Existing-home sales are moving up and down in a fairly narrow range that is well above the level of activity during the first half of last year. With job growth, low interest rates, bargain home prices and an improving economy, the pent-up demand is coming to market and we expect housing to be notably better this year.”
Total housing inventory at the end of March declined 1.3 percent to 2.37 million existing homes available for sale, which represents a 6.3-month supply at the current sales pace, the same as in February. Listed inventory is 21.8% below a year ago and well below the record of 4.04 million in July 2007.
“We were expecting a seasonal increase in home listings, but a lack of inventory has suddenly become an issue in several markets with not enough homes for sale in relation to buyer interest,” Yun said. “Home sales could be held back because of supply factors and not by demand.”
The national median existing-home price for all housing types was $163,800 in March, up 2.5 percent from March 2011. Distressed homes – foreclosures and short sales sold at deep discounts – accounted for 29% of March sales (18% were foreclosures and 11% were short sales), compared with 34% in February and 40% in March 2011.
Foreclosures typically sold for an average 19% below market price in March, while short sales were discounted 16%.
NAR President Moe Veissi, said buyer traffic is up. “Our members are reporting an increase in foot traffic from a year ago, but more importantly, home shoppers this year are much more serious about finding the right home and making an offer,” he said. “Stabilizing home prices and historically favorable affordability conditions are giving buyers more confidence, and REALTORS® have become more optimistic since the beginning of the year from the positive shift in buyer patterns.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.95% in March, up from a record low 3.89% in February; the rate was 4.84% in March 2011; record keeping began in 1971.
Source: NAR