Sales of previously owned homes slipped 0.6% in March from February as the supply of homes on the market edged up for the second month in the row, according to the National Association of Realtors.
However, the inventory remains tight at a 4.7-month supply and it clearly favors sellers over buyers.
“We need a housing supply of over six months to have a generally balanced market between homebuyers and sellers, but it’s unlikely we’ll get there without greater increases in housing construction,” said NAR chief economist Lawrence Yun.
The National Association of Realtors reported Monday that sales of existing single-family homes fell to a 4.92 million seasonally adjusted annual rate in March from a 4.95 million rate in February.
So far, low inventories are pushing up house prices and holding down sales.
“This was not entirely unexpected, as housing inventories are lagging far behind demand,” said Quicken Loans chief economist Bob Walters. “While this scenario is good for home values, it also has a detrimental effect on sales as consumers need choices when shopping for a home,” he added.
Economists at IHS Global Insight are forecasting that existing home sales should climb about 8% this year to 5.05 million units.
Global Insight economists Michael Montgomery and Stephanie Karol point out that some potential
Sales over the next six months should “record only a token change from recent levels as the market normalizes. A part of that normalizing is getting fence-sitting sellers off the fence with higher prices,” the Global Insight economists said.
