Home Sales, Prices Tumble Again As Inventory Swells
Sales of existing homes fell in March while the median home price declined, compared with the price a year ago, as a severe slump in housing showed no signs of abating.
The National Association of Realtors said that sales of existing single-family homes and condominiums dropped by 2 percent in March to a seasonally adjusted annual rate of 4.93 million units.
The median price of a home sold last month dropped to $200,700, a decline of 7.7 percent from the median price a year ago.
That was the second-biggest year-over-year price decline on records dating back to 1999.
The inventory of homes for sale swelled by 40,000 to 4.06 million homes, or a 9.9 months' supply at the current sales pace from 9.6 months in February.
The drop in home values nationwide has pushed many borrowers toward foreclosure and upset lending standards in many markets.
Of the homes for sale, 18 percent have negative equity and so are either in foreclosure proceedings or headed for a 'short sale' that will see the lender write off some of the original loan amount.
"This has been a frustration of our members," said NAR chief economist Lawrence Yun. "Lenders have been dragging their feet (in approving short sales)."
The March sales decline, which was in line with expectations, followed a 2.9 percent increase in sales in February.
The February rise, which followed six straight monthly declines, had raised hopes that the steep housing correction could be hitting bottom.
However, many private analysts said they do not expect a rebound for a number of months, given the problems weighing on housing from a severe glut of unsold homes to tighter credit standards for prospective buyers and a rising tide of mortgage foreclosures.
Sales were down 19.3 percent compared with a year ago, reflecting the depth of the housing bust, which is coming after sales set records for five consecutive years.
For March, sales were down 6.5 percent in the Midwest and 3.5 percent in the South but increased by 2.2 percent in the Northeast and 2.2 percent in the West.
The Northeast was the only region of the country to experience a rise in median prices, which were up 4.6 percent compared with a year ago.
Prices were down in all other regions of the country, dropping by 14.7 percent in the West, 7.1 percent in the South and 5.3 percent in the Midwest.
NAR economist Yun said that he expected sales would begin to show improvements in the second half of this year, helped by an improved availability of mortgage-backed insurance from the Federal Housing Administration and higher limits for jumbo mortgages, loans which are critically important in high-priced areas of the country such as California.
Separately, the Office of Federal Housing Enterprise Oversight said its index of home prices is down 3.1 percent since a peak in April 2007.
They were down 0.6 percent in the Mountain region: Arizona, Colorado, Idaho, Montana, Nevada, New Mexico Utah and Wyoming. Prices fell 0.2 percent in the South Atlantic region: Florida, Georgia, South Carolina, North Carolina, Virginia, West Virginia, Maryland, Delaware and the District of Columbia.
The OFHEO index is calulated using purchase prices of houses financed with mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac. The index was introduced in the fourth quarter of 2007.