WASHINGTON – U.S. home resales fell to their lowest level in more than 1-1/2 years in March, but there were signs a recent downward trend that has plagued the housing market may be drawing to an end.
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The National Association of Realtors said on Tuesday home sales slipped 0.2 percent to an annual rate of 4.59 million units, the lowest level since July 2012.
The decline was, however, less than economists' expectations for a fall to a 4.55-million pace. February's sales pace was unrevised at 4.60 million units.
"The negative housing momentum, which was exacerbated by severe weather conditions during the winter months, may be starting to fade," said Gennadiy Goldberg, an economist at TD Securities in New York.
Existing home sales are counted at the closing of contracts and March's sales reflected contracts signed in January and February, when the country was in the grip of an unusually cold and snowy winter.
Home resales rose in the Northeast and Midwest, but fell in the West and South.
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Even accounting for the terrible weather, the housing market has slowed significantly since last summer as a run-up in mortgage rates, high house prices and a dearth of properties sidelined potential buyers.
Existing home sales have been trending lower since last August, briefly popping up in December. Compared to March last year, sales were down 7.5 percent.
Housing is lagging the economy's snap-back from a winter-induced lull, but could be close to finding a bottom, with some leading housing market indicators such as pending sales and mortgage applications starting to show signs of stabilizing.
The NAR report showed an increase in the stock of houses for sale and a rise in the share of first-time buyers, hinting at some improvement.
Last month, the inventory of unsold homes on the market rose 4.7 percent from February, lifting the months' supply to 5.2. That was the highest since April and compared to 5.0 months in February.
Inventory typically rises at the start of the spring selling season as sellers put their houses on the market. Supply remains below the 6.0 months that is normally considered as a healthy balance between supply and demand.
First-time buyers accounted for 30 percent of the transactions, the largest in a year and an increase from 28 percent in February.
"The report shows that positive underlying dynamics may be starting to reassert themselves during the typically busier spring home buying season," said Goldberg.
A market share of 40 percent to 45 percent for first-time buyers is considered by economists and real estate professionals as ideal.
With inventory still tight, the median price for a previously owned home rose 7.9 percent from a year ago to a six-month high. The pace of acceleration is, however, slowing.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)