Sales of previously-owned homes rose higher than expected in March, reversing a three-month slide. The ""National Association of Realtors"":http://www.realtor.org/press_room/news_releases/2010/04/ehs_favorable (NAR) said Thursday that existing-home sales jumped 6.8 percent to a 5.35 million-unit annual sales rate.[IMAGE]
Year-over-year, sales are up 16.1 percent. According to NAR, the March numbers are just the beginning of what will be a strong spring season. Lawrence Yun, NAR's chief economist, called the latest report a sign of ""broad home sales recovery in nearly every part of the country.""
The surge last month was largely attributed to buyers racing to make the window for the homebuyer tax credit. Borrowers must be under contract by April 30 to take advantage of the government incentive. First-time buyers, who are eligible for the larger $8,000 tax break, purchased 44 percent of homes in March, according to a separate NAR study.[COLUMN_BREAK]
""The home buyer tax credit has been a resounding success as these underlying trends point to a broad stabilization in home prices,"" said Lawrence Yun, NAR chief economist. ""This is preserving perhaps $1 trillion in largely middle class housing wealth that may have been wiped out without the housing stimulus measure.""
""With home values stabilizing, a revival in home buying confidence will likely help the housing market get back on its feet even as the tax credit impact disappears,"" Yun said.
Based on NAR's data, the national median price for a previously owned home was $170,700 in March, up 0.4 percent from a year earlier. Distressed homes, which NAR says are typically sold at a 15 percent discount, accounted for 35 percent of sales last month.
""Foreclosures have been feeding into the inventory pipeline at a fairly steady pace and are being absorbed manageably,"" Yun said. ""In fact, foreclosures are selling quickly, especially in the lower price ranges that are attractive to first-time homebuyers.""
Although total housing inventory at the end of March rose 1.5 percent to 3.58 million existing homes available for sale, with the elevated sales pace, the months of backlog declined. NAR says the housing supply has slipped from 8.5 months in February to 8.0 months.
Raw unsold inventory is 1.8 percent below a year ago, and is 21.7 percent below the record of 4.58 million units in July 2008. Inventory has trended down from year-ago levels for 20 months running.