Existing-home sales rise 3.7% in March

Resales of U.S. single-family homes and condos rose 3.7% in March to a seasonally adjusted annual rate of 5.10 million, the National Assn. of Realtors reported Wednesday.

Resales had dropped a revised 8.9% in February to 4.92 million units, compared with the initial estimate of a 9.6% plunge to 4.88 million.

Economists surveyed by MarketWatch had expected sales to rise to 5.0 million.

“This was a fairly positive report in that it retraced some of the weakness in the February numbers,” said Michael Gapen, economist at Barclays Capital.

Since March 2010, the median cost of a home sold has declined by 5.9%, to $159,600.

Distressed sales keep rising, accounting for 40% of the total in March, the group’s data showed.

Resales increased across three of four regions last month, up by 3.9% in the Northeast, by 1% in the Midwest and by 8.2% in the South. They fell 0.8% in the West.

March sales of single-family homes grew 4% to a seasonally adjusted annual rate of 4.45 million. Sales of condos rose 1.6% to an annual rate of 650,000.

Lawrence Yun, the Realtors’ chief economist, cast the report in upbeat terms. “Existing-home sales have risen in six of the past eight months, so we’re clearly on a recovery path,” he said.

But Josh Shapiro, chief U.S. economist at MFR Inc., said sales have essentially returned to the weak rate that prevailed before the government tried to help the market with a tax credit targeted for home buyers last year.

If sales remain at this pace for the rest of the year, 2011 will be a better year for home sales than last year, Yun said.

The supply of existing homes ticked down to 8.4 months from 8.5 months in February.

Robb writes for MarketWatch.com/McClatchy.