Sales of existing homes in March underperformed by historical standards, with purchases remaining mostly flat, the National Association of Realtors reported today.
Existing-home sales slid 0.2 percent from February to March, to a seasonally adjusted annual rate of 4.59 million, a 7.5 percent decline from a year ago, NAR said. Sales gains in the Northeast and Midwest were offset by decreases in the West and South, the trade group reported.
“There really should be stronger levels of home sales given our population growth,” said NAR Chief Economist Lawrence Yun in a statement. “In contrast, price growth is rising faster than historical norms because of inventory shortages.”
Declining affordability, unusually cold weather and a persistent inventory shortage are among factors that have contributed to a housing slowdown in recent months. Pending home sales fell for the eighth straight month in February, suggesting that existing-home sales wouldn’t substantially improve in March or April.
But the inventory shortage has been easing, and some experts say that should stimulate more home purchases.
Housing inventory rose 4.7 percent from February to March, to 1.99 million homes, up 3.1 percent from a year ago. Inventory in March would last for 5.2 months at the current sales pace, up from five months in February and 4.7 months a year ago, NAR said.
“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,” Yun said.
Bill McBride, author of the finance and economics blog Calculated Risk, said that for existing home sales, “the key number is inventory – and the key story is inventory is still low, but up year-over-year.”