April 26th, 2013
New data reveals that sales of existing homes fell in March – largely due to a decline in inventory as a result of heightened demand for homeownership.
The National Association of Realtors (NAR) reports that existing home sales, which represent completed transactions, dipped 0.6 percent last month to a seasonally adjusted annual rate of 4.92 million. While this is lower than the pace of 4.95 million completed sales in February, it is a 10.3 percent increase from the 4.46 million existing sales transactions completed in March 2012.
The report also reveals that existing sales have been above last year’s levels for 21 consecutive months signaling a stronger market and renewed interest in homeownership.
“Buyer traffic is 25 percent above a year ago when we were already seeing notable gains in shopping activity,” said NAR chief economist Lawrence Yun. “In the same time frame, housing inventories have trended much lower, which is continuing to pressure home prices. The good news is home construction is rising and low mortgage rates are continuing to keep affordability conditions at historically favorable levels.”
Home prices have also strengthened in recent months prompting more buyers to get off the sidelines to purchase a home before prices become too high. Rising prices also represent good news for existing homeowners many of whom are moving from a negative to a positive equity position.