Thursday April 23, 05:24 PM
US home sales drop 3%, may be steadying: survey
WASHINGTON (AFP) - US home sales fell 3.0 percent in March, resuming a downward move after a February jump, but the market is seeing signs of stabilization, the National Association of Realtors said Thursday.
The industry group said overall sales of existing homes and apartments fell to a seasonally adjusted annual rate of 4.57 million units in March from a revised 4.71 million in February.
This was 7.1 percent lower a year earlier and below the Wall Street estimate of a pace of 4.65 million.
The decline was a disappointment for a sector hurting for more than two years, but the industry group said first-time buyers are responding to low mortgage interest rates and tax credits.
Lawrence Yun, NAR chief economist, said the market appears to be stabilizing with modest monthly ups and downs, and that first-time buyers are driving the market, with trouble still present in the high-priced home segment.
"The share of lower priced home sales has trended up, indicating a return of many first-time buyers," he said.
"Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans."
Interest rates remain high for so-called jumbo loans that cannot be guaranteed by federal agencies. These loans are above a level of 417,000 to 729,750 dollars, depending on the region.
The association said median sales prices rose 4.2 percent over the month to 175,200 dollars, but was 12.4 percent below the level of March 2008.
So-called distressed sales accounted for just over half of all transactions in March, and these homes are selling for 20 percent less than traditional properties.
Total housing inventory at the end of March fell 1.6 percent to 3.74 million homes, which represents a 9.8 month supply at the current sales pace, compared with 9.7 months in February.
Some analysts said the report suggests some steadying in the housing market, which has been in a freefall and triggered a massive global economic shock.
"This pace is in the range of the recent sales performance, suggesting that existing home sales have bottomed," said Celia Chen at Moody's Economy.com.
"Policy initiatives will help stabilize the market further, as rock-bottom mortgage interest rates spur some demand. Foreclosures will also lift sales in coming months, at the cost of further price depreciation."
Ian Shepherdson at High Frequency Economics said the latest report is "a bit disappointing but the big picture is still clear" that the collapse following the Lehman Brothers (NYSE: LEH - news) bankruptcy last year is over.
"Sales are volatile month-to-month, but the trend appears to be flattening off," he said.
But he added that at the current sales pace with high inventories, "prices will continue to fall rapidly for the foreseeable future, though at least the rate of decline should not get any worse."
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
