U.S. Existing Home Sales Rose 5.1% in March

WASHINGTON—Sales of previously owned homes rose in March, a sign of recovery in the housing market after a rocky start to the year although inventory remained tight.

Sales rose 5.1% in March from the prior month to a seasonally adjusted annual rate of 5.33 million, the National Association of Realtors said Wednesday. Economists surveyed by The Wall Street Journal had expected sales would rise 4.3% to a rate of 5.30 million in March.

March's sales were 1.5% higher than March a year ago. February's sales pace was revised down slightly to 5.07 million.

The National Association of Realtors said there were 1.98 million existing homes available for sale at the end of March, down 1.5% from a year earlier and a 4.5-month supply at the current sales pace.

"Closings came back in force last month as a greater number of buyers - mostly in the Northeast and Midwest -overcame depressed inventory levels and steady price growth to close on a home," said Lawrence Yun, the association's chief economist. He added that sales were weaker at the very low and very high ends of the market due to supply limitations and affordability pressures.

Existing-home sales appear to have stabilized somewhat in March after falling in February from a slight gain in January, indicating that housing ended the first quarter on a relatively solid footing. Some economists blamed the February slump on factors like harsh winter weather and volatility in the stock market.

The national median sale price for a previously owned home last month was $222,700, up 5.7% from a year earlier, marking the 49th straight month of year-over-year gains.

Sales posted strong gains in the Midwest and Northeast. The Midwest's sales rose 9.8% from the prior month to an annual rate of 1.23 million. Sales in the Northeast, which have lagged during the recovery, increased 11.1% from February to an annual rate of 700,000.

In the West, sales rose 1.8% in March from February. The South saw sales rise by 2.7% from February.

Data from the housing sector have been mixed in recent weeks. Housing starts fell 8.8% on the month in March, the Commerce Department said Tuesday, the lowest level of homebuilding since October.

Low interest rates, an improving job market and rising rents all bode well for the housing market currently, although low inventory and high prices could curb those solid fundamentals somewhat. An April gauge of homebuilder sentiment held for the third straight month at 58, its lowest level since May, the National Association of Homebuilders said on Monday. That's still a positive reading, but follows eight months of readings above 60.

News Corp, owner of The Wall Street Journal, also owns Move Inc., which operates a website and mobile products for the National Association of Realtors.

Write to Ben Leubsdorf at [e-mail]

(END) Dow Jones Newswires

April 20, 2016 10:25 ET (14:25 GMT)

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