March’s U.S. home resales up 1.1 percent

FILE- In this March 28, 2018, file photo, a for sale sign is shown outside a single-family home on the market in Denver. On Monday, April 23, the National Association of Realtors reports on March sales of existing homes. (AP Photo/David Zalubowski, File)
FILE- In this March 28, 2018, file photo, a for sale sign is shown outside a single-family home on the market in Denver. On Monday, April 23, the National Association of Realtors reports on March sales of existing homes. (AP Photo/David Zalubowski, File)

WASHINGTON -- U.S. sales of existing homes increased 1.1 percent on a monthly basis in March, which suggests that buyers are undeterred by the dwindling number of properties available on the market.

The National Association of Realtors said Monday that homes sold last month at a seasonally adjusted annual pace of 5.60 million, up from 5.54 million in February. This sales rate is higher than the 2017 total, but March sales were down slightly over the past 12 months.

The housing market continues to be in the grip of an inventory crunch that has restricted sales and growth in homeownership. Even as the overall economy has improved, there has been a 7.2 percent decline in listings from a year ago to just 1.67 million homes. The decline in listings could bottom out later this year, because there has been a recent uptick in people listing homes that are then quickly purchased. But rising mortgage rates are also making it less likely that homeowners will choose to sell in order to buy another property at a higher interest rate.

Nor have gains in new construction been enough to make up for the decline in inventories.

"Demand is outstripping supply, and builders have been constrained in their efforts to add new homes by tight labor, zoning restrictions, and most recently a run-up in materials costs," said Stephen Stanley, chief economist at Amherst Pierpont Securities.

Homes stayed on the market for 30 days in March, down from 34 days a year ago in a sign that the lack of inventory is prompting buyers to sign contracts quickly.

The shortage is also causing prices to grow at roughly double the pace of wages. The median sales price has risen 5.8 percent from a year ago to $250,400.

Home sales rose last month in the Northeast and Midwest, but they fell in the South and West.

The overall increase reflected gains in higher-priced homes as well as condominiums and co-op units, the association said. Half of homes sold in March were on the market for less than a month, the group said.

Sales of homes priced between $100,000 and $250,000 were down 7.8 percent from a year ago, while homes at $750,000 or above were up more than 15 percent. The association said it expects inventories to pick up around late summer or autumn in part because housing permits are rising and construction wages are advancing, drawing in more workers. There's also potential for regulatory changes among small banks, a key source of loans to homebuilders.

Existing-home sales account for 90 percent of the market and are calculated when a contract closes. March figures are due today for new-home sales, which are tabulated when contracts get signed, making them a timelier indicator despite their smaller share.

Information for this article was contributed by Katia Dmitrieva of Bloomberg News.

Business on 04/24/2018

Upcoming Events