The March sales rate for resale homes dropped 19.3 percent and the median resale home price fell 7.7 percent compared to the same month last year, the National Association of Realtors trade group reported today.
Sales of resale homes, including single-family homes, townhomes, condominiums and cooperatives, dropped to a seasonally adjusted annual rate of 4.93 million in March. This rate is a projection of a monthly sales total over a 12-month period, adjusted to account for seasonal fluctuations in sales activity.
Sales activity declined 2 percent in March compared to February.
Regionally, the median price last month dropped 14.7 percent in the West, fell 7.1 percent in the South, dropped 5.3 percent in the Midwest and rose 4.6 percent in the Northeast year-over-year.
The rate of resale home sales dropped 18.8 percent in the Northeast, 22.3 percent in the West, 20 percent in the South and 15.9 percent in the Midwest in March compared to March 2007.
The rate of sales for single-family resale homes dropped 18.4 percent in March compared to the same month last year, and dropped 2.7 percent compared to February.
Resale condo and co-op sales rose to a rate of 580,000 in March, up 3.6 percent compared to February. But this rate was down 25.5 percent from the March 2007 rate.
The supply of all resale homes for sale in March reached a level of 9.9 months, which means that it would take an estimated 9.9 months to sell the entire inventory of for-sale homes at the March sales pace.
This supply was up 3.1 percent from February and 32 percent compared to March 2007.
For single-family resale homes for sale, the months’ supply rose to 9.5 months in March, and the supply grew to 12.8 months for resale condo and co-op units.
NAR reported that the median existing-home price for all home types was $200,700 in March, up from $195,600 in February but down from $217,400 in March 2007.
The single-family resale home price slipped 8.3 percent since March 2007, falling to $198,200 in March 2008. And the resale condo and co-op median price dropped 2.8 percent year-over-year in March, to $219,400.
"Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets," said Lawrence Yun, NAR chief economist, in a statement.
"At the same time, many buyers continue to bide their time with a large number of homes to choose from, while other potential buyers remain on the sidelines."
Yun said the Federal Reserve "should be extra careful about further rate cuts" to the federal funds rate, citing "elevated inflation."
"Monetary stimulus is plentiful — what is needed more at this point is a home-buyer tax credit to get buyers off the sidelines and prevent the market from overshooting on the downside," he stated.
Richard F. Gaylord, NAR’s 2008 president and a broker for RE/MAX Real Estate Specialists in Long Beach, Calif., said in a statement, "It appears there is some overreaction on the part of some lenders now in requiring higher down-payment percentages than may be necessary."
He also said that some buyers "are able to take advantage of more lenient policies for FHA loans," though there are "localized bottlenecks in loan processing" because lenders in some cases have limited experience in working with FHA loans.
The next resale home sales report for April will be released May 23, and NAR’s next annual forecast and Pending Home Sales Index report is scheduled for release on May 7.
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