A low supply of homes for sale took a bite out of existing home sales in March while prices continued to climb, the National Association of Realtors says.
Total existing home sales declined 0.6% to a seasonally adjusted annual rate of 4.92 million in March from a downwardly revised 4.95 million in February, the Realtors reported Monday.
Wall Street had been expecting sales to rise in the month, and the miss is a sign that it’s been “overestimating the strength on the housing market recovery,” says Steven Ricchiuto, chief economist for Mizuho Securities.
Sales were still 10.3% above last year’s pace in March.
Despite the month over month drop in sales, there were more signs of a market recovery, says Jed Kolko, chief economist of real estate website Trulia.
For the second month in a row, inventory was up slightly. Also, the March drop in sales came from a shift of distressed home sales to more conventional sales. They were up 23% year-over-year. Increased sales of properties that aren’t either foreclosures or short sales is a sign of a market in recovery, Kolko says.
Inventory, though expanding, is still tight, says Lawrence Yun, NAR chief economist. As a result, homes are selling fast and multiple bidding is more common. In March, the typical home sold was on the market for one month less than a year ago.