Existing-home sales

Existing-home sales edged down in March, remaining within a narrow range of sales activity that has persisted since last September, according to the National Association of Realtors®.

Existing-home sales - including single-family, townhomes, condominiums and co-ops - were down 2.0% to a seasonally adjusted annual rate of 4.93 million units in March from a level of 5.03 million in February, and remain 19.3% below the 6.11 million-unit pace in March 2007. A rise in condo sales in March was offset by a drop in single-family sales. Regionally, sales rose in the Northeast and West but fell in the Midwest and South.

Lawrence Yun, NAR chief economist, said the market is performing unevenly. “Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets,” he said. “At the same time, many buyers continue to bide their time with a large number of homes to choose from, while other potential buyers remain on the sidelines.”

The national median existing-home price for all housing types was $200,700 in March, down 7.7% from a year ago when the median was $217,400. Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively higher sales activity in low-cost markets.

A mix of market conditions continues around the country, but areas showing healthy price gains include Des Moines, Iowa; Austin, Texas; and Durham, N.C.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.97% in March from 5.92% in February; the rate was 6.16% in March 2007.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said there are problems with the implementation of mortgage guidelines. “It appears there is some over-reaction on the part of some lenders now in requiring higher down payment percentages than may be necessary,” he said.

“On the other hand, buyers in many parts of the country are able to take advantage of more lenient policies for FHA loans. However, because lenders don’t have enough underwriting experience with FHA loans in high-cost areas, there are localized bottlenecks in loan processing. Consumers should consult with a Realtor® in their area to learn about the kind of financing that may be available to meet their needs.”

Yun offered a caution. “With elevated inflation, the Federal Reserve should be extra careful about further rate cuts,” he said. “Mortgage interest rates, which do not move directly with Fed funds rates, may rise measurably and hurt the housing recovery if inflation gets out of hand. Monetary stimulus is plentiful - what is needed more at this point is a home buyer tax credit to get buyers off the sidelines and prevent the market from overshooting on the downside.”

Total housing inventory rose 1.0% at the end of March percentage to 4.06 million existing homes available for sale, which represents a 9.9-month supply at the current sales pace, up from a 9.6-month supply in February.

Single-family home sales fell 2.7% to a seasonally adjusted annual rate of 4.35 million in March from 4.47 million in February, and are 18.4% below the 5.33 million-unit pace in March 2007. The median existing single-family home price was $198,200 in March, down 8.3% from a year ago.

Existing condominium and co-op sales rose 3.6% to a seasonally adjusted annual rate of 580,000 units in March from 560,000 in February, but are 25.5% below the 779,000-unit level a year ago. The median existing condo price was $219,400 in March, which is 2.8% lower than March 2007.

Regionally, existing-home sales in the Northeast rose 2.2% to an annual pace of 910,000 in March, but are 18.8% below March 2007. The median price in the Northeast was $284,300, up 4.6% from a year ago.

Existing-home sales in the West rose 2.2% in March to a level of 940,000 but are 22.3% below a year ago. The median price in the West was $285,100, which is 14.7% lower than March 2007.

In the South, existing-home sales fell 3.5% to an annual rate of 1.92 million in March and are 20.0% below March 2007. The median price in the South was $167,200, down 7.1% from a year ago.

Existing-home sales in the Midwest dropped 6.5% to an annual rate of 1.16 million in March, and are 15.9% below a year ago. The median price in the Midwest was $152,600, down 5.3% from March 2007