Total existing home sales dropped 0.2% to a seasonally adjusted annual rate of 4.59 million in March, and were 7.5% below the 4.96 million-unit pace of March 2013, according to the NAR. March’s sales volume was the lowest since July of 2012.
“There really should be stronger levels of home sales given our population growth,” said NAR Chief Economist Lawrence Yun. “In contrast, price growth is rising faster than historical norms because of inventory shortages.”
Yun was optimistic about the months ahead, however.
“With ongoing job creation and some weather delayed shopping activity, home sales should pick up, especially if inventory continues to improve and mortgage interest rates rise only modestly,” he said.
First-time home buyers accounted for 30% of March sales, according to the NAR. However, tight underwriting standards mean first-time buyers often encounter difficulty.
“There are indications that the stringent mortgage underwriting standards are beginning to ease a bit, particularly regarding credit score requirements, but they remain a headwind for entry-level and single-income home buyers,” NAR President Steve Brown said. “We also have tight inventory in the lower price ranges where many starter homes are found, but rising new-home construction means some owners will be trading up and more existing homes will be added to the inventory. Hopefully, this will create more opportunities for first-time buyers.”
Existing home sales slipped to a near-two-year low last month, according to data released by the National Association of Realtors.