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US existing home sales rise sharply; prices advance
[WASHINGTON] US home resales rebounded more than expected in March, suggesting the housing market recovery remained intact despite signs that economic growth probably stalled in the first quarter.
The National Association of Realtors said on Wednesday existing home sales surged 5.1 per cent to an annual rate of 5.33 million units last month. February's sales pace was revised slightly down to 5.07 million units from the previously reported 5.08 million units.
Economists polled by Reuters had forecast sales rising 3.5 per cent to a 5.30 million-unit pace in March. Sales were up 1.5 per cent from a year ago. Home resales have been volatile since the introduction of new mortgage disclosure rules late last year.
Existing home sales rose in all four regions last month, jumping 11.1 per cent in the Northeast and accelerating 9.8 per cent in the Midwest.
Despite a report on Tuesday showing a plunge in housing starts and building permits in March, housing remains a bright spot amid indications that economic growth slowed to a crawl in the first three months of the year.
Housing is being supported by a buoyant labor market, which has resulted in an acceleration in household formation. Sales, however, remain constrained by a dearth of homes available for sale, which is limiting choices for buyers.
The number of unsold homes on the market in March rose 5.9 per cent from February to 1.98 million units. Supply was, however, down 1.5 per cent from a year ago.
At March's sales pace, it would take 4.5 months to clear the stock of houses on the market, up from 4.4 months in February. A six-month supply is viewed as a healthy balance between supply and demand.
Despite the improvement in supply, the median house price increased 5.7 per cent from a year ago to US$222,700 last month.
The rise in house prices is outstripping wage gains. While that could make home purchasing expensive for first-time buyers, it is boosting equity for homeowners, which could encourage them to put their homes on the market.
Last month, the share of first-time buyers was 30 per cent, unchanged from both February and a year ago.