Existing Home Sales Stall; First-Time Buyers Rev Up

Existing-home sales eased in March although first-time buyers traffic rose in response to low mortgage interest rates and tax credits, the National Association of Realtors (NAR) said in a monthly survey released today. Existing-home sales — including single-family, townhomes, condominiums and co-ops — declined 3% to a seasonally adjusted annual rate of 4.57m units in March from a downwardly revised level of 4.71m in February. The month’s sales were 7.1% lower than the 4.92m-unit pace in March 2008. Single-family home sales slipped 2.8% to a seasonally adjusted annual rate of 4.1m in March, down from from a pace of 4.22m in February and 5.7% below the 4.35mn-unit pace in March ’08. The median existing single-family home price was $174,900 in March, 11.5% below year-ago prices. “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 NAR chief economist Lawrence Yun. “Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans.” First-time buyers accounted for 53% of transactions, based largely on contracts offered before the $8,000 first-time home buyer tax credit became available, according to a March NAR practitioner survey. Traffic from inquiries on the tax credit should positively impact summer home sales, especially if record-low interest rates hold, Yun said. Although prices rose from February to March, the national median existing-home price for all housing types fell 12.4% from March ’08 to $175,200, the existing home sale survey showed. Prices rose 4.2% from February to March, higher than the typical 1.8% seasonal increase between those two months. Distressed properties accounted for just over half of all transactions in March, and typically sold for 20% less than traditional homes, NAR found. Regionally, existing-home sales slipped 8% in the Northeast from February to 690,000 units annually. Existing-home sales fell 1.7% in the South to a 1.71m-unit pace and 4.2% in the West to a 1.13m-unit pace. Meanwhile, existing home sales remained unchanged in the Midwest at a 1.04m-unit annual pace. The median price in the Northeast was $231,700, down 18.4% from March 2008. The Midwest posted a median price of $141,300, 6.1% below year-ago levels. The median price in the South fell 12.2% from March ’08 to $146,900, while the median price in the West slipped 11.1% from last year to $252,400. Write to Diana Golobay at [email protected].