(Home sales story updated for trading in homebuilder stocks)
NEW YORK (
) -- Existing home sales increased by 6.8% in March, buoyed by the homebuyer tax credit. First time home buyers purchased 44% of home in March, up from 42% in February.
The major homebuilders, including
, had rallied slightly on Wednesday ahead of Thursday's existing home sales report, and Friday's new home sales report.
The most profitable homebuilder,
also reported on Wednesday earnings that showed profits gains but were behind on the Street's EPS estimate. Analysts were divided on the NVR earnings, optimistic about the leading homebuilder's order growth in the most recent quarter, but concerned about limited upside in the sector's most pricey stock.
The homebuilder rally seemed to gain a little steam from the latest numbers by midday Friday. It was a down day for the market, but D.R. Horton, Lennar, Pulte and KB Home were all up by 4% to 5%. NVR had a more modest rise of 1% on Thursday at midday.
The 6.8% increase brought existing home sales up to a seasonally adjusted annual rate of 5.35 million units in March, from 5.01 million in February. Year over year, the strong sales month in March for existing homes was 16.1% above the 4.61 million-unit level in March 2009.
The new existing homes sales data from the National Association of Realtors highlighted improvement across all U.S. regions.
"Sales have been above year-ago levels for nine straight months, and inventory has trended down from year-ago levels for 20 months running," said National Association of Realtors' chief economist Lawrence Yun.
Total housing inventory at the end of March rose 1.5% to 3.58 million existing homes available for sale, which represents an 8-month supply, down from an 8.5-month supply in February. Raw unsold inventory is 1.8% below a year ago, and is 21.7% below the record of 4.58 million in July 2008.
The NAR economist also said foreclosures and pricing are playing a role in the rebound of existing home sales. "Foreclosures have been feeding into the inventory pipeline at a fairly steady pace and are being absorbed manageably," Yun said. "In fact, foreclosures are selling quickly, especially in the lower price ranges that are attractive to first-time home buyers."
Distressed homes, typically sold at a 15% discount, accounted for 35% of sales last month -- the same level of distressed sales as in February.
The national median existing-home price for all housing types was $170,700 in March, up marginally from a year ago.
Single-family home sales rose 7.3% to a rate of 4.68 million in March, from a level of 4.36 million in February. The median existing single-family home price was $170,700 in March, up 0.6% from March 2009.
Single-family median prices rose in 14 out of 20 metropolitan statistical areas versus a year ago, and five metro areas experienced double-digit increases, including San Diego, St. Louis and Boston.
Existing-home sales in the Midwest and South had the largest increases in March, up 7.2% and 7.1% respectively.
-- Reported by Eric Rosenbaum in New York.
Follow TheStreet.com on
and become a fan on
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.