By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — Sales of existing homes fell 2.6% in March, the second monthly drop, though the sales pace for the first quarter of 2012 was the best in five years, according to data released Thursday.
The National Association of Realtors said sales ran at a seasonally adjusted annual rate of 4.48 million, compared to 4.60 million in February. The NAR had previously estimated sales of 4.59 million in February.
Economists in a MarketWatch-compiled poll had expected a sales pace of 4.63 million for March.
On a year-over-year basis, sales were up 5.2%, the ninth straight month of year-on-year gains.
By region, March’s sales tumbled 7.4% in the West, fell 1.7% in the Northeast and slipped 1.1% in the South. Midwest sales came in flat.
The first-quarter average was 4.57 million — a figure that would mark a five-year high in activity if sustained. Last year, the sales rate slowed in the second and third quarter, according to NAR data.
“While existing sales are down for the second consecutive month, we are likely continuing to see payback from increases earlier this year,” said Mark Vitner, senior economist at Wells Fargo Securities.
“That said, we could see one more month of disappointing data, but we still contend the recent declines are not indicative of the trend. Stabilization will become more apparent once we return to normal weather.”
Access to credit’s an issue ... for builders
Tampa, Charlotte among gainers.
• U.S. homeownership at 18-year low
Lawrence Yun, chief economist of the trade group, doesn’t expect that to occur this time around, citing buyer interest, better economic fundamentals, low interest rates and less expensive homes.
Yun also noted a shortage of inventories — particularly in places like Miami and Phoenix — which he said is holding back sales.
While major builders such as Toll Brothers Inc. /zigman2/quotes/201912487/composite TOL +4.73% and Lennar Corp. /zigman2/quotes/202536373/composite LEN -3.12% /zigman2/quotes/207749640/composite LEN.B -3.97% have access to credit, smaller builders are having difficulty getting credit, Yun said. Publicly traded builders represent only about 20% of the overall market.
March’s inventories fell 1.3% to 2.37 million, or 6.3 months supply at current sales rate. Compared to a year ago, inventories are down 22%.
“Builders want to respond, but they cannot respond because they cannot get construction loans,” he said.
The median existing-home sales price was $163,800, an increase of 2.5% on a year-on-year basis. Price gains may due to the types of homes that were sold, Yun said.
He also said the upper-end market is beginning to move, while houses for under $100,000, a previous hot spot, aren’t being sold as often. Yun speculated that recent gains in the stock market are helping the upper end of the market.
Meanwhile, distressed sales accounted for 29% of all transactions, down from 34% in February and 40% a year earlier. Foreclosures typically sold for 19% below market price and short sales were discounted 16%, the NAR said.
All-cash transactions accounted for 32%, and first-time buyers represented 33% of all buyers. Investors accounted for 21% of all transactions.
Separately, the Labor Department reported elevated jobless claims in the latest week. Read story on jobless claims.
The Philadelphia Fed reported slowing growth in local manufacturing conditions. See story on Philly Fed.
The Conference Board reported improving leading economic index in March. See story on leading indicators.