Favorable market conditions and the home-buyer tax credit led to a 6.8% increase in existing-home sales in March, the National Association of Realtors (NAR) reports. Last month, sales rose to a seasonally adjusted annual rate of 5.35 million units – up from 5.01 million in February and more than 16% above the 4.61 million-unit level in March 2009.
‘Sales have been above year-ago levels for nine straight months, and inventory has trended down from year-ago levels for 20 months running,’ says Lawrence Yun, NAR's chief economist. ‘The home-buyer tax credit has been a resounding success, as these underlying trends point to a broad stabilization in home prices. This is preserving perhaps $1 trillion in largely middle-class housing wealth that may have been wiped out without the housing stimulus measure.’
Total housing inventory at the end of March rose 1.5% to 3.58 million existing homes available for sale, which NAR says represents an eight-month supply at the current sales pace – down from an 8.5-month supply in February. Raw unsold inventory is 1.8% below a year ago and is 21.7% below the record of 4.58 million in July 2008.
"Foreclosures have been feeding into the inventory pipeline at a fairly steady pace and are being absorbed manageably," Yun says. "In fact, foreclosures are selling quickly, especially in the lower price ranges that are attractive to first-time home buyers."
A parallel NAR practitioner survey shows first-time buyers purchased 44% of homes in March – a 2% increase over February. Investors accounted for 19% of transactions in March, unchanged from February; the remaining sales were to repeat buyers. All-cash sales remain elevated at 27% in March – the same as in February.
The national median existing-home price for all housing types was $170,700 in March – up 0.4% from March 2009. Distressed homes – typically sold at a 15% discount – accounted for 35% of sales last month – unchanged from February.