Home Resales Down in March

Existing-home sales slipped in March, after exhibiting a hopeful rise the month prior, according to ""data released Thursday"":http://www.realtor.org/wps/wcm/connect/90300d004dd64c0d8d92ade06077afc4/REL0903EHS.pdfxMOD=AJPERES&CACHEID=90300d004dd64c0d8d92ade06077afc4 by the ""National Association of Realtors"":http://www.realtor.org (NAR). The association did note however, that the market is starting to see a pick-up in activity from first-time buyers based on transactions even before the federal tax credit became available, which leads NAR to expect a prominent increase in sales from this market segment in the coming months.
For the month of March, overall existing-home sales - including single-family, townhomes, condominiums and co-ops - declined 3.0 percent to a seasonally adjusted annual rate of 4.57 million units, down from a revised annual rate of 4.71 million in February. March sales were 7.1 percent lower than the 4.92 million-unit pace set at the same time last year.
Lawrence Yun, NAR's chief economist, said the market appears to be stabilizing with modest monthly ups and downs, and that first-time buyers are now driving the market. ""The share of lower priced home sales has trended up, indicating a return of many first-time buyers,"" Yun said. ""Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans.""
Although prices rose from February to March, NAR reported that the national median existing-home price for all housing types last month was $175,200, down 12.4 percent from March 2008. The price increase from February to March was 4.2 percent, which is much higher than the typical 1.8 percent seasonal increase between those two months. Distressed properties, which accounted for just over half of all transactions in March, typically are selling for 20 percent less than traditional homes, NAR said.
An NAR practitioner survey in March showed first-time buyers accounted for 53 percent of transactions, based largely on contracts offered before the $8,000 first-time homebuyer tax credit became available.
Yun commented, ""Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit. By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions.""
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said first-time buyers are crucial at this stage of a housing recovery. ""The housing market always heals from the bottom up, and with large numbers of first-time buyers entering the market it will become a little easier for sellers to trade up or down, according to their needs,"" McMillan said.
According to Freddie Mac, the ""national average commitment rate"":http://www.freddiemac.com/pmms/pmms30.htm for a 30-year, conventional, fixed-rate mortgage fell to a record low 5.00 percent in March, down from 5.13 percent in February. The rate was 5.97 percent in March 2008.
NAR explained that such low mortgage rates are contributing to record-high housing affordability conditions and helping local markets recover. For example, home sales in Minneapolis, Northern Virginia, Las Vegas, Phoenix, and most areas of California and Florida have now reached levels that are higher than they were a year ago.
NAR reported that total housing inventory at the end of March fell 1.6 percent to 3.74 million existing homes available for sale. That figure represents a 9.8-month supply at the current sales pace, compared with a 9.7-month supply in February.
Regionally, existing-home sales in the Northeast fell 8.0 percent to an annual pace of 690,000 in March, and are 22.5 percent below a year ago. The median price in the Northeast was $231,700, down 18.4 percent from March 2008.
Existing-home sales in the Midwest were unchanged in March at a pace of 1.04 million, but are 11.1 percent lower than March 2008. The median price in the Midwest was $141,300, which is 6.1 percent below a year ago.
In the South, existing-home sales slipped 1.7 percent to an annual pace of 1.71 million in March and are 10.9 percent below a year ago. The median price in the South was $146,900, down 12.2 percent from March 2008.
Existing-home sales in the West declined 4.2 percent to an annual rate of 1.13 million in March, but are actually 18.9 percent higher than a year earlier. The median price in the West was $252,400, which is 11.1 percent below March 2008.