US existing home sales edge higher in March

Washington: US sales of existing homes rose in March for the second month as the market recovered from unfavorable winter weather, according to industry data released Monday.

But headwinds in the market meant homebuying remained below recent peaks, amid mounting prices and tight supply making homes harder to find.

Sales rose 1.1 percent over February for previously owned single-family houses, condos, town houses and co-ops, according to the National Association of Realtors.

The increase put sales at an annual rate of 5.60 million units, the fastest in four months and marginally higher than an analyst forecast.

Despite the increase, sales were still 1.2 percent below their level in March of last year.

“The unwelcoming news is that while the healthy economy is generating sustained interest in buying a home this spring, sales are lagging year ago levels because supply is woefully low and home prices keep climbing above what some would-be buyers can afford,” Lawrence Yun, NAR’s chief economist, said in a statement.

The median price gained 5.8 percent over the same month last year, reaching $250,400 — the 73rd straight month of year-over-year gains.

And while the supply of available homes for sale gained 5.7 percent to reach 1.67 million, this is still more than seven percent lower than the same time last year.

At the current sales pace, this amounts to a 3.6 month supply, down from 3.8 months a year ago.

In addition to rising prices on strong demand and dwindling supply, other market factors worked against affordability.

Analysts also say December’s tax cuts, which limit federal deductions on real estate taxes, could make ownership less attractive in some states.

Average interest rates for 30-year fixed-rate mortgages rose for the sixth straight month, reaching 4.44 percent — the highest since December 2013.

Half of homes sold in March were on the market for less than a month.

Ian Shepherdson of Pantheon Macroeconomics said the March figures were a “pleasant if modest surprise.”

Mortgage applications implied the pace of sales would stabilize around 5.7 million units in the coming months but did not appear to have room to rise much higher, he said in a client note.