Existing-home sales ease more than forecast to 5.2 million
Sales of previously owned homes eased more than forecast in March, suggesting the housing market is still finding its footing after a weak 2018.
Contract closings decreased to a 5.21 million annual rate, falling 4.9% from February's downwardly revised pace, the National Association of Realtors said Monday. The median sales price climbed 3.8% from a year earlier to $259,400.
Sales decreased for a fourth time in five months despite lower mortgage rates, sustained wage gains and slower home price appreciation. The data signal the residential estate sector may need more time to stabilize after sales fell to a three-year low in January. The report adds to signs of a cooling market in March, including a government report Friday showing housing starts fell to the slowest pace since May 2017.
Other data signal greater momentum in the critical spring season, from homebuilder sentiment rising to a six-month high to mortgage applications at their highest level in almost nine years. "There's a supply-demand mismatch," Jessica Lautz, NAR’s vice president of demographics and behavioral insights, said at a briefing in Washington. "More inventory is needed at the lower end and a price reduction may be needed at the upper end," she said, adding that NAR projects sales to accelerate later this year.
Economists surveyed by Bloomberg had projected a 5.3 million sales pace in March. February's reading was revised to 5.48 million from 5.51 million. Home purchases fell in all four regions, led by a 7.9% drop in the Midwest. At the current pace, it would take 3.9 months to sell all the homes on the market, compared with 3.6 months in February; Realtors see anything below five months of supply as a sign of a tight market.
First-time buyers made up 33% of sales, up from 32% the prior month. Existing-home sales account for about 90% of U.S. housing and are calculated when a contract closes. New-home sales, which make up the remainder, are counted when contracts are signed. Government data on March new-home sales, due Tuesday, should offer a better picture of how residential real estate concluded the first quarter.