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Home Sales Fall in March

Existing homes slow to move off market

April 23, 2009

The National Association of Realtors reports sales of existing homes — including single-family, townhomes, condominiums and co-ops — fell 3.0 percent to a seasonally adjusted annual rate of 4.57 million units in March from a downwardly revised level of 4.71 million in February. Sales were off 7.1 percent from March 2008.

"The share of lower priced home sales has trended up, indicating a return of many first-time buyers, which we also see in a parallel member survey," said Lawrence Yun, NAR's chief economist. "Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans."

Although prices rose from February to March, the national median existing-home price for all housing types 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.

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 home buyer tax credit became available.

"Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit," Yun said. "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."

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 5.00 percent in March from 5.13 percent in February; the rate was 5.97 percent in March 2008; data collection began in 1971.

"Record-high housing affordability conditions are helping markets recover, with home sales higher than a year ago in Minneapolis, Northern Virginia, Las Vegas, Phoenix and most areas of California and Florida."

Total housing inventory at the end of March fell 1.6 percent to 3.74 million existing homes available for sale, which represents a 9.8-month supply at the current sales pace, compared with a 9.7-month supply in February.

Single-family home sales slipped 2.8 percent to a seasonally adjusted annual rate of 4.10 million in March from a pace of 4.22 million in February, and are 5.7 percent below the 4.35 million-unit pace in March 2008. The median existing single-family home price was $174,900 in March, which is 11.5 percent lower than a year ago.

Existing condominium and co-op sales fell 4.1 percent to a seasonally adjusted annual rate of 470,000 units in March from 490,000 in February, and are 17.8 percent below the 572,000-unit pace a year ago. The median existing condo price4 was $177,600 in March, down 18.7 percent from March 2008.

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 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.

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