By Jeffrey Sparshott and Kris Hudson
WASHINGTON--Sales of previously owned homes rose to the highest
level in 18 months in March, a sign the housing market is gaining
strength after a slow start to the year.
Existing-home sales increased 6.1% last month from February to a
seasonally adjusted annual rate of 5.19 million, the National
Association of Realtors said Wednesday. That was the highest level
since September 2013.
Economists surveyed by The Wall Street Journal had expected
March sales would increase to a pace of 5.03 million.
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.
The jump in March sales follows two lackluster months amid bad
winter weather. The February sales pace was 4.89 million and
January was only 4.82 million. But the latest figures suggest the
mix of low mortgage rates, steady job creation and pent-up demand
could push full-year sales to prerecession levels.
"The sector is coming back from its winter doldrums and most of
the factors argue for even more improvement going forward," said
Joel Naroff, president of Naroff Economic Advisors.
There are still factors holding back the market, including
rising prices and limited inventories.
The median sale price for a previously owned home was up 7.8%
from a year earlier to $212,100 in March, NAR said.
"This price gain of near 8% is not healthy, considering people's
incomes are only rising by 2%," said Lawrence Yun, NAR's chief
economist.
At the current sales pace, it would take 4.6 months to exhaust
the supply of existing homes on the market, NAR said Wednesday. Mr.
Yun said a six-month supply is considered a more sustainable
level.
More new homes are the key to boosting housing supplies.
Official government figures suggest building activity has been
subdued so far this year, though builders are upbeat.
NVR Inc., parent of Ryan Homes and other brands, on Monday said
its 3,926 sales orders in the first quarter marked an 18% increase
from a year earlier. And on Tuesday, D.R. Horton Inc., the largest
U.S. home builder by homes sold, said its 11,135 orders in the
quarter were a 30% gain from a year ago.
Both builders saw their price gains slow as they boosted sales
volumes by selling a greater number of less-expensive homes.
D.R. Horton Chief Executive Officer David Auld said momentum
from the builder's fiscal second quarter ended March 31 carried
into April. "The spring selling season is in full swing," Mr. Auld
said Wednesday on a conference call with investors. "During the
second quarter, housing market conditions were healthy and
relatively stable."
The Commerce Department is slated to disclose national figures
for March new-home sales on Thursday.
Sales of existing homes account for roughly 90% of all home
purchases in the U.S. March sales were up 10.4% from a year
earlier.
Write to Jeffrey Sparshott at jeffrey.sparshott@wsj.com and Kris
Hudson at kris.hudson@wsj.com
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