U.S. existing home sales up 6.8 percent in March

Existing home sales in the United States rose by 6.8 percent in March to a seasonally adjusted annual rate of 5.35 million units, the National Association of Realtors (NAR) reported on Thursday.

Lawrence Yun, NAR chief economist, said it is encouraging to see a broad home sales recovery in nearly every part of the country, with two important underlying trends.

"Sales have been above year-ago levels for nine straight months, and inventory has trended down from year-ago levels for 20 months running," said Yun. "The home buyer tax credit has been a resounding success as these underlying trends point to a broad stabilization in home prices. This is preserving perhaps 1 trillion dollars in largely middle class housing wealth that may have been wiped out without the housing stimulus measure."

Total housing inventory at the end of March rose 1.5 percent to 3.58 million existing homes available for sale, which represents an 8.0-month supply at the current sales pace, down from an 8.5- month supply in February.

Raw unsold inventory is 1.8 percent below a year ago, and is 21. 7 percent below the record of 4.58 million in July 2008.

"Foreclosures have been feeding into the inventory pipeline at a fairly steady pace and are being absorbed manageably," Yun said. "In fact, foreclosures are selling quickly, especially in the lower price ranges that are attractive to first-time home buyers."

A parallel NAR practitioner survey shows first-time buyers purchased 44 percent of homes in March, up from 42 percent in February.

Investors accounted for 19 percent of transactions in March, unchanged from February; the remaining sales were to repeat buyers. All-cash sales remain elevated at 27 percent in March, the same as in February.

The national median existing-home price for all housing types was 170,700 dollars in March, up 0.4 percent from March 2009. Distressed homes, typically sold at a 15 percent discount, accounted for 35 percent of sales last month -- unchanged from February.

"With home values stabilizing, a revival in home buying confidence will likely help the housing market get back on its feet even as the tax credit impact disappears," Yun said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage dipped to 4.97 percent in March from 4.99 percent in February; the rate was 5.00 percent in March 2009.

Source:Xinhua