IBJNews

Sales of U.S. existing homes sink to 20-month low

Back to TopCommentsE-mailPrintBookmark and Share

Sales of existing U.S. homes slipped in March to their lowest level since July 2012 as rising prices and a tight supply of available homes discouraged many would-be buyers.

The National Association of Realtors said Tuesday that sales edged down 0.2 percent, to a seasonally adjusted annual rate of 4.59 million. It was the seventh drop in the past eight months.

Sales rose in the Northeast and Midwest, suggesting that cold winter weather did not slow sales. And the Realtors' group says the scant decline shows that sales are stabilizing and might strengthen in coming months as the spring buying season picks up. Many Realtors report seeing more potential buyers at open houses.

As IBJ reported last week, deals for homes sales slid in central Indiana for the seventh straight month.

Sales fell in the West and South, where prices have risen the most in the past year. The price increases were smaller in the Northeast and Midwest.

Nationwide, the median sales price last month was $198,200, up 7.4 percent from 12 months ago.

The sharpest sales increase occurred among homes priced at $1 million or above. Purchases rose 8 percent in that category. Sales fell in nearly every other price group.

Other measures of home prices have shown stronger gains. Real estate data provider CoreLogic says prices rose 12.2 percent in the past year. That might be discouraging some potential investors, who accounted for just 17 percent of home sales in March, the lowest proportion since August. It was down from 21 percent in February.

But, in a positive sign, first-time buyers made up 30 percent of home sales in March, the highest proportion in a year. That's still below the roughly 40 percent that's consistent with a healthy housing market. First-timers have struggled to save for down payments. They also face tight credit standards.

The Realtors' group expects 5 million existing homes to change hands this year. That's down from 5.1 million last year, which was the most in seven years. It's also below the 5.5 million that reflects a healthy market.

Sales of existing homes rose steadily in the first half of last year, reaching an annual pace of 5.38 million in July. But sales slowed in the fall as rising mortgage rates and higher prices began to squeeze some buyers out of the market. Freezing temperatures and winter storms also kept prospective buyers away from open houses.

Home prices are rising even as sales slow. That's a sign that the supply of available homes is tight, forcing potential buyers to make higher bids.

There were nearly 2 million homes for sale at the end of March. But at the current sales pace, that's enough to last only 5.2 months, below the 6 months' supply that is considered normal.

More construction is needed to boost the supply, the Realtors' group argues.

The average rate on a 30-year mortgage was 4.27 percent last week, according to mortgage buyer Freddie Mac. That was down from 4.34 percent the previous week. But the rate is still about a full percentage point above last spring's record lows.

ADVERTISEMENT

  • DUH
    $7 dollar an hour jobs that this "recovery" are producing do not buy homes... DUH

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. A Tilted Kilt at a water park themed hotel? Who planned that one? I guess the Dad's need something to do while the kids are on the water slides.

  2. Don't come down on the fair for offering drinks. This is a craft and certainly one that belongs in agriculture due to ingredients. And for those worrying about how much you can drink. I'm sure it's more to do with liability than anything else. They don't want people suing for being over served. If you want a buzz, do a little pre-drinking before you go.

  3. I don't drink but go into this "controlled area" so my friend can drink. They have their 3 drink limit and then I give my friend my 3 drink limit. How is the fair going to control this very likely situation????

  4. I feel the conditions of the alcohol sales are a bit heavy handed, but you need to realize this is the first year in quite some time that beer & wine will be sold at the fair. They're starting off slowly to get a gauge on how it will perform this year - I would assume if everything goes fine that they relax some of the limits in the next year or couple of years. That said, I think requiring the consumption of alcohol to only occur in the beer tent is a bit much. That is going to be an awkward situation for those with minors - "Honey, I'm getting a beer... Ok, sure go ahead... Alright see you in just a min- half an hour."

  5. This might be an effort on the part of the State Fair Board to manage the risk until they get a better feel for it. However, the blanket notion that alcohol should not be served at "family oriented" events is perhaps an oversimplification. and not too realistic. For 15 years, I was a volunteer at the Indianapolis Air Show, which was as family oriented an event as it gets. We sold beer donated by Monarch Beverage Company and served by licensed and trained employees of United Package Liquors who were unpaid volunteers. And where did that money go? To central Indiana children's charities, including Riley Hospital for Children! It's all about managing the risk.

ADVERTISEMENT