News Column

Low Inventory Keeps Roof on Home Sales

May 22, 2013

Staff Reports --

Hispanic couple buying a house

Sales of existing homes were down in March due to constraints on inventory, according to the National Association of Realtors.

Existing home sales sank 0.6 percent, from 4.95 million in February to 4.92 million in March. That's still 10.3 percent above the year-ago figure, the NAR reported. Prices have increased for 13 months running, and have been beating their corresponding year-ago figures for 21 months in a row.

Existing home sales comprise single-family homes, condos and co-ops, and townhomes.

"The good news is home construction is rising and low mortgage rates are continuing to keep affordability conditions at historically favorable levels," Lawrence Yun, NAR chief economist, said in a statement. "The bad news is that underwriting standards remain excessively tight, while renters are getting squeezed by higher rents."

The median price nationally stood at $184,300 in March for all types of homes, according to the NAR report, an increase of 11.8 percent over last year.

Looking ahead to the April numbers, however, Zillow had a slightly different take on home prices. For the 12-month period from April 2013 through April 2014, U.S. home values are expected to rise 4 percent to approximately $164,648, according to the Zillow Home Value Forecast.

"April marks the sixth straight month of annual home value appreciation of 5 percent or above, the longest such streak since the height of the bubble in 2006," Stan Humphries, Zillow chief economist, said in a statement.


Related: Home Value Appreciation Continued to Climb in April: Zillow.


Inventory stood at 1.93 million homes for sale at the end of March, only a 4.7-month supply, according to the NAR. That was little changed over February's inventory, conditions that favor sellers, Yun said. The supply was good for 6.2 months a year back, meaning more houses would have to be built before the market would come back into balance, he added.

The national average commitment rate was 3.57 percent for a 30-year fixed-rate mortgage, Freddie Mac reported. The rate was 3.53 percent in February and 3.95 percent in March 2012, but dropped to 3.45 percent in April.

Median on-market time for homes of all types was 62 days in March, well below the 91 day period in March 2012, according to the NAR.

That means "multiple bidding is becoming more common" again, said NAR President Gary Thomas, "and more homes are selling above the asking price."

Sales were up in the Midwest, down in the South and West, and unchanged in the Northeast.

The National Association of Realtors represents 1 million members in the residential and commercial real estate industries.


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