Existing Home Sales Weak Again

The housing market continues to trudge along its downward path, as existing home sales fell 2% in March, while inventories rose once again and remain at historically high levels.

Sales totaled a seasonally adjusted annual rate of 4.93 million in March, compared with 5.03 million in February, the National Association of Realtors said Tuesday. Sales declined 19% from a year earlier. Economists expected 4.95 million sales in March, according to Reuters.

The median existing home price meanwhile fell 8% from a year ago to $200,700. "Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively higher sales activity in low-cost markets," NAR said in its release.

Total housing inventory rose 1% at the end of March to 4.06 million existing homes available for sale, which represents a 9.9-month supply at the current sales pace, up from a 9.6-month supply in February.

The high inventory levels remain bad news for homebuilders, which are wrestling with an ongoing supply/demand imbalance in the U.S. housing market.

"Inventories continue to plague the housing market on both the new and existing side," said Wachovia economic analyst Adam York in a report to clients. "Inventories had been showing some progress late last year, but seem to have stalled around the four million unit level. An improvement here remains a precursor to an overall housing recovery."

Homebuilder stocks were mixed on the report. Pulte Homes(PHM Quote - Cramer on PHM - Stock Picks) fell 2.5% to $14.22, while Ryland(RYL Quote - Cramer on RYL - Stock Picks) rose 0.8% to $34.18.