Home resales resume slide after February advance

BLOOMBERG

Sales of previously owned U.S. homes fell in March by more than forecast, underscoring a housing market that’s still on shaky footing despite some signs of stabilizing. Contract closings decreased 2.4% last month to an annualized pace of 4.44 million after an outsize jump in February, according to data released Thursday by the National Association of Realtors. The median estimate in a Bloomberg survey of economists called for 4.5 million.

“Home sales are trying to recover and are highly sensitive to changes in mortgage rates,”

Lawrence Yun, NAR’s chief economist, said in a statement. “At the same time, multiple offers on starter homes are quite common, implying more supply is needed to fully satisfy demand.”

Some 28% of homes sold during the month went above list price, Yun added. About 5% were classified as vacation-home sales, down from 7% a year ago.

Even though mortgage rates have come off their peak, many homeowners locked in much lower rates in recent years and are reluctant to move. Also, the Federal Reserve will likely raise borrowing costs again and credit conditions have tightened notably since several banks collapsed last month.

However, Yun suggested that, barring any large jump in mortgage rates, existing-home sales may have already bottomed. Before February, sales had dropped for a record 12 months in a row.

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