Home sales slipped across the U.S. in March as would-be buyers continue to grapple with tough credit standards and too few houses on the market.
Sales of previously owned homes - the bulk of the housing market - fell two-tenths of a percent in March to their slowest pace in nearly two years, according to the National Assn. of Realtors. It was the third straight month of declines.
The median home price climbed, but not as fast as it has in recent months, up 7.9% to $198,500.
NAR chief economist Lawrence Yun said he expected the fundamentals of the market suggested that the sales slowdown would turn around soon.
"There really should be stronger levels of home sales given our population growth," he said. "With ongoing job creation and some weather-delayed shopping activity, home sales should pick up, especially if inventory continues to improve and mortgage interest rates rise only modestly."
The number of homes on the market rose nearly 5%, to roughly 5.2 months' worth of unsold homes available. That's up from February but still below the six-month supply normally considered healthy. NAR President Steve Brown noted that supply is tighter at lower price points, which along with tight underwriting standards is making it hard for first-time buyers to get into the market. But, he said, growth in new-home construction and sales could make more entry-level homes available as people trade up.
"Hopefully this will create more opportunities for first-time buyers," he said.
Sales of condominiums, which tend to be less expensive, fell more sharply than single-family homes, another sign of challenges at the lower end of the market. And the share of foreclosure and other distressed sales continued to dwindle, indicating fewer lower-priced homes for sale.
Sales fell most sharply in the West, where regions like Southern California have seen big drops in sales volume compared to last year.
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