22 April 2013 17:43 [Source: ICIS news]
WASHINGTON (ICIS)--US sales of existing homes fell by a narrow 0.6% in March from February, national real estate officials said on Monday, but the slight decline was attributed to a lack of properties for sale as buyer demand continues to improve.
In its monthly report, the National Association of Realtors (NAR) said that existing home sales last month were at a seasonally adjusted annual pace of 4.92m, below the downwardly revised February rate of 4.95m units.
February’s pace of existing home sales had originally been estimated at 4.98m.
Although March sales of single-family homes, town homes and condominiums were lower than in February and also below January’s pace of 4.94m, the NAR noted that last month’s selling activity was 10.3% higher than in the same month last year.
In addition, the NAR said, “sales of existing homes have been above year-ago levels for 21 consecutive months”.
NAR chief economist Lawrence Yun said that data from the association’s member real estate agencies show that “buyer traffic is 25% above a year ago”, but at the same time, “housing inventories have trended much lower”.
“The good news is that home construction is rising and low mortgage rates are continuing to keep affordability conditions at historically favourable levels,” he said.
However, Yun added, “the bad news is that underwriting standards remain excessively tight”.
In the wake of the historic 2005-2009 US housing market meltdown, banks have maintained unusually strict lending criteria for mortgage loans, demanding top credit ratings and large down-payments from would-be borrowers, thresholds that many potential home buyers cannot meet.
Tight lending criteria also hinder new home construction because housing contractors, most of whom are small businesses, cannot qualify for bank loans for property acquisition and infrastructure development for housing projects.
The March downturn in existing home sales, however narrow, comes amid other housing data reports that suggest the residential property recovery remains shaky.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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