Tuesday, April 22, 2008

Existing-Home Sales Decline


WASHINGTON -- Existing-home sales fell during March after making a surprising climb in February.

Home resales fell to a 4.93 million annual rate, a 2.0% decrease from February's unrevised 5.03 million annual pace, the National Association of Realtors said Tuesday. Resales fell 19% from March 2007's 6.11 million rate.

The median home price was $200,700 in March, down 7.7% from $217,400 in March 2007. The median price in February this year was $195,600. Falling prices have kept would-be buyers from signing off on property as they wait for still-lower price tags.

NAR economist Lawrence Yun said the market is performing unevenly. "Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets," Mr. Yun said. "At the same time, many buyers continue to bide their time with a larger number of homes to choose from, while other potential buyers remain on the sidelines."

Lenders have tightened their standards on home loans, contributing to the credit crunch that is restraining the U.S. economy. Those tighter standards have priced marginal buyers out of the market and made purchasing more difficult and costly for prime borrowers.

The March resales level was right in line with Wall Street expectations of 4.93 million sales rate for previously owned homes. The average 30-year mortgage rate was 5.97% in March, up from 5.92% in February, according to Freddie Mac.

Inventories of homes increased 1.0% at the end of March to 4.06 million available for sale, which represented a 9.9-month supply at the current sales pace. There was a 9.6-month supply at the end of February.

Regionally, existing-home sales in March were mixed.

Sales fell 6.5% in the Midwest, rose 2.2% in the Northeast, rose 2.2% in the West, and fell 3.5% in the South.

Write to Maya Jackson Randall at Maya.Jackson-Randall@dowjones.com

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