* Softer than expected report, adding to recent indications of a pause in the housing market recovery early this year. Existing home sales dipped 0.6% in March to a 4.92 million unit annual rate, little changed from 4.90 million at the end of last year and down slightly from the recent high of 4.96 million in November. Tight mortgage lending conditions continue to be a restraint on a stronger recovery, but, on the more positive side, the National Association of Realtors also blamed low inventories as the flow of distressed sales continues to ease, supporting a solid rebound in prices in the past year.
* Along with the flattening out in existing home sales in recent months, the homebuilders survey has turned lower in recent months, falling to 42 in April from a seven-year high of 47 in January, single-family housing starts fell 5% in March and are close to flat year-todate, and new home sales fell 5% in February after hitting a four-year high in January. Residential investment is still on pace to post a robust 14% gain in Q1 after rising 15% in 2012, but some slowing may be seen in Q2 if the recovery doesn't get back on track soon.
* The number of homes listed for sale, which is not seasonally adjusted in this report, rose 1.6% in March to 1.93 million, which was 4.7 months of supply at the current sales pace, up from 4.6 in February but still well below the 6 months considered balanced normally.
* There is still a significant overhang of shadow inventories, but this has come down substantially from the early 2010 peak, and a slowing flow of distressed properties has supported a solid rebound in average home selling prices. Distressed sales made up 21% of existing home sales in March, down from 24% in February and 29% in March 2012. This has supported a 19% rebound in the median sales price from the $154,600 January 2012 low to $184,300 in March.
* Housing affordability is at historically unprecedented levels. Principal and interest payments on a $184,300 median-priced existing home after a 20% down payment with the recent average 3.41% 30-year mortgage rate would be only $656 a month, unusually low relative to rising average rents. Difficulty obtaining a mortgage for borrowers with less than pristine credit remains an important headwind to a stronger recovery in home sales, however.
Perhaps someone should be making this public. It might get more houses on the market. My guess is that the loss in value during the housing crash has lots of folks thinking that they won't get a reasonable price for their home....which might still be true.