Existing-home sales fell .6 percent in March compared to February, according to the National Association of Realtors (NAR), which attributed the decline to tight inventory.
March’s seasonally adjusted annual rate of 4.92 million sales was down from a downwardly revised 4.95 million in February, but is 10.3 percent higher than the 4.46 million-unit pace in March 2012.
Prices, however, continued to rise. The national median existing-home price was $184,300 last month, 11.8 percent higher than March 2012. Last month’s price rise is the strongest since November 2005, when prices were up 12.9 percent from a year earlier. The last time there were 13 consecutive months of year-over-year price increases was from May 2005 to May 2006.
In a statement, Lawrence Yun, NAR chief economist, said there is more demand than supply in the current market.
"Buyer traffic is 25 percent above a year ago when we were already seeing notable gains in shopping activity," Yun said in the statement. "In the same timeframe housing inventories have trended much lower, which is continuing to pressure home prices. The good news is home construction is rising and low mortgage rates are continuing to keep affordability conditions at historically favorable levels. The bad news is that underwriting standards remain excessively tight, while renters are getting squeezed by higher rents."
Total housing inventory at the end of March increased 1.6 percent to 1.93 million existing homes available for sale, which represents a 4.7-month supply at the current sales pace, up from 4.6 months in February. Listed inventory remains 16.8 percent below a year ago when there was a 6.2-month supply.
"The inventory improvement last month results from a seasonal gain, but conditions continue to broadly favor sellers. We need a housing supply of over six months to have a generally balanced market between home buyers and sellers, but it’s unlikely we’ll get there without greater increases in housing construction," Yun added in the statement.
Distressed homes – foreclosures and short sales – accounted for 21 percent of March sales, down from 25 percent in February and 29 percent in March 2012. Thirteen percent of March sales were foreclosures, and 8 percent were short sales. Foreclosures sold for an average discount of 15 percent below market value in March, while short sales were discounted 13 percent.
