RISMEDIA, April 24, 2009-Existing-home sales eased in March 2009 but first-time buyers are responding to low mortgage interest rates and tax credits, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 3.0% to a seasonally adjusted annual rate of 4.57 million units in March from a downwardly revised level of 4.71 million in February, and were 7.1% lower than the 4.92 million-unit pace in March 2008.
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. “The share of lower priced home sales has trended up, indicating a return of many first-time buyers, which we also see in a parallel member survey,” he said. “Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans.”
Although prices rose from February to March, the national median existing-home price for all housing types was $175,200, down 12.4% from March 2008. The price increase from February to March was 4.2%, which is much higher than the typical 1.8% seasonal increase between those two months. Distressed properties, which accounted for just over half of all transactions in March, typically are selling for 20% less than traditional homes.
An NAR practitioner survey in March showed first-time buyers accounted for 53% of transactions, based largely on contracts offered before the $8,000 first-time home buyer tax credit became available. “Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit,” Yun said. “By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions.”
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said first-time buyers are crucial at this stage of a housing recovery. “The housing market always heals from the bottom up, and with large numbers of first-time buyers entering the market it will become a little easier for sellers to trade up or down, according to their needs,” he said. “Although homeownership builds wealth over the long term, buyers need to evaluate their options. In this market, buyers and sellers who use a Realtor® to represent them are making a smart move,” McMillan said.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 5.00% in March from 5.13% in February; the rate was 5.97% in March 2008; data collection began in 1971.
“Record-high housing affordability conditions are helping markets recover, with home sales higher than a year ago in Minneapolis, Northern Virginia, Las Vegas, Phoenix and most areas of California and Florida.”
Total housing inventory at the end of March fell 1.6% to 3.74 million existing homes available for sale, which represents a 9.8-month supply t the current sales pace, compared with a 9.7-month supply in February.
Single-family home sales slipped 2.8% to a seasonally adjusted annual rate of 4.10 million in March from a pace of 4.22 million in February, and are 5.7% below the 4.35 million-unit pace in March 2008. The median existing single-family home price was $174,900 in March, which is 11.5% lower than a year ago.
Existing condominium and co-op sales fell 4.1% to a seasonally adjusted annual rate of 470,000 units in March from 490,000 in February, and are 17.8% below the 572,000-unit pace a year ago. The median existing condo price was $177,600 in March, down 18.7% from March 2008.
Regionally, existing-home sales in the Northeast fell 8.0% to an annual pace of 690,000 in March, and are 22.5% below a year ago. The median price in the Northeast was $231,700, down 18.4% from March 2008.
Existing-home sales in the Midwest were unchanged in March at a pace of 1.04 million but are 11.1% lower than March 2008. The median price in the Midwest was $141,300, which is 6.1% below a year ago.
In the South, existing-home sales slipped 1.7% to an annual pace of 1.71 million in March and are 10.9% below a year ago. The median price in the South was $146,900, down 12.2% from March 2008.
Existing-home sales in the West declined 4.2% to an annual rate of 1.13 million in March but are 18.9% higher than a year earlier. The median price in the West was $252,400, which is 11.1% blow March 2008.
For more information, visit www.realtor.org.