Sales of Existing Homes Sustain an Encouraging Pace in March

Despite slightly higher mortgage rates, the nation’s housing recovery held its ground last month as sales of existing homes remained at the highest level in more than three years, a real estate trade group said Monday.

“The economy is finally moving clearly toward recovery and we’re feeling it not just in housing but other areas as well,” said Dorcas T. Helfant, president of the Chicago-based National Assn. of Realtors.

The association said existing homes sold at a seasonally adjusted annual rate of 3.49 million units nationwide in March, unchanged from the February level.

Although last month’s sales fell slightly in California after an unusually strong February, analysts were impressed that existing home sales remained 5.2% higher than a year ago when home sales began heating up after the end of the Persian Gulf War.

Housing experts were also heartened that volatile fixed mortgage rates in recent months have not had a roller-coaster effect on housing sales.

“The rise in rates probably got people to thinking that they’ve seen the bottom and they better act fast” to buy a house, said James Z. Pugash, director of Montgomery Securities Real Estate in San Francisco. “When rates are real low, a slight rise can sometimes spur sales.”

Analysts believe that the current housing sales pace can be sustained unless mortgage rates rise substantially. Nationally, 30-year fixed mortgage rates stood at 8.93% last week, after rising as high as 9.03% in March, according to HSH Associates, a Butler, N.J.-based publisher of mortgage information. Most analysts believe that mortgage rates will remain around the 9% level for the remainder of the year.

“The economy is coming along; things look very encouraging,” said Daryl Delano, an economist at Cahners Economics in Newton, Mass.

The National Assn. of Realtors is forecasting a 7.2% rise in existing homes sales this year. Resales totaled 3.22 million in 1991.

The National Assn. of Home Builders projects that new home construction will increase 26% this year. But California will have a somewhat less robust 14.3% increase, according to the Construction Industry Research Board in Burbank.

The northeastern United States posted the biggest increase in existing home sales in March, climbing 12.2% from February to an annual rate of 550,000 units. The median price in the Northeast was $145,000, up 2.5% from a year ago.

U.S. Existing Home Sales Continue to Recover; Sales in California Dip

In the Nation Existing home sales, seasonally adjusted annual rate, millions of units:

March, 1992: 3.49

February, 1992: 3.49

March, 1991: 3.18

Source: National Assn. of Realtors In the State Existing home sales, seasonally adjusted annual rate, thousands of units:

March, 1992: 452,470

February, 1992: 463,520

March, 1991: 426,510

Source: California Assn. of Realtors