Existing-home sales in the United States was flat in March and the growth in home prices moderated, according to data from the National Association of Realtors.
Existing-home sales are completed transactions that include single-family homes, townhomes, condominiums, and co-ops.
Total March 2014 existing-home sales decreased slightly—0.2%—to a seasonally adjusted annual rate of 4.59 million, from 4.60 million in February. March 2014 was down 7.5% from the March 2013 unit pace of 4.96 million.
March 2014's sales volume was the slowest since July 2012, when it was 4.59 million— underperforming by historical standards, according to Lawrence Yun, NAR chief economist.
"There really should be stronger levels of home sales given our population growth,” Yun said. “In contrast, price growth is rising faster than historical norms because of inventory shortages.”
He added, “With ongoing job creation and some weather delayed shopping activity, home sales should pick up, especially if inventory continues to improve and mortgage interest rates rise only modestly.”
In March 2014, the median existing-home price for all housing types was $198,500, which is 7.9% higher than in March 2013. Distressed homes, which include foreclosures and short sales, was 14% of March sales, from 16% in February 2014 and down 21% from March 2013.
“With rising home equity, we expect distressed homes to decline to a single-digit market share later this year,” Yun said.
At the end of March 2014 total housing inventory was up 4.7% to 1.99 million existing homes, which is a 5.2-month supply at the current pace of sales. That supply was 5.0 months in February. The inventory is up from 3.1% from March 2013, when the supply was 4.7-months.
First-time buyers made 30% of March 2014 purchases, up from 28% in February 2014. First-time buyers also made up 30% of purchases in March 2013.
"There are indications that the stringent mortgage underwriting standards are beginning to ease a bit, particularly regarding credit score requirements, but they remain a headwind for entry-level and single-income home buyers," said NAR President Steve Brown, co-owner of Irongate, Inc., Realtors in Dayton, OH.
Brown added, "We also have tight inventory in the lower price ranges where many starter homes are found, but rising new-home construction means some owners will be trading up and more existing homes will be added to the inventory. Hopefully, this will create more opportunities for first-time buyers."
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