News

US previously occupied home sales fell 2.6 per cent, signalling housing market still weak

WASHINGTON – Americans bought fewer previously owned homes in March, a reminder that the housing market remains weak.

The National Association of Realtors said Thursday that home sales fell 2.6 per cent last month to a seasonally adjusted annual rate of 4.48 million. That followed a revised 4.6 million sold in February.

A mild winter may have encouraged more people to buy earlier, essentially stealing sales from March.

The first three months of 2012 made up the best winter for sales in five years. The increase offers some encouragement ahead of the spring-buying season. Still, sales remain far below the 6 million per year that economists equate with healthy markets.

First-time buyers, who are critical to a housing recovery, rose to 33 per cent of all purchases last month. In healthy markets, they make up at least 40 per cent.

The supply of homes on the market fell 1.3 per cent last month to 2.37 million, which could help drive up prices further in the coming months.

One reason is that home foreclosures declined, although they are still high. Homes at risk of foreclosure made up 29 per cent of sales, down from 34 per cent in February. In healthier markets, foreclosures make up less than 10 per cent of sales.

There have been other signs in recent months that the housing market is slowly improving.

Builders are laying plans to construct more homes in 2012 than at any other point in the past 3 1/2 years. More jobs and a better outlook among buyers could also make 2012 the first year since 2008 that construction adds to the U.S. economy.

The unemployment rate has fallen from 9.1 per cent in August to 8.2 per cent last month. Employers added an average of 212,000 jobs a month from January through March.

Mortgage rates are hovering just above record lows. And the median sales price of homes rose for the second straight month in March, to $163,800.

Sales fell across most of the country. They were unchanged on a seasonal basis in the Midwest but fell by 1.1 per cent in the South, 1.7 per cent in the Northeast and 7.4 per cent in the West.