Existing-home sales were stronger than expected in March, dropping just 0.7% from a year ago, but inventories rose to the highest level since 1998 and sales were weak in the West.
Total existing-home sales, including single-family, townhomes, condos and co-ops, came in at a seasonally adjusted annual rate of 6.92 million homes, compared with 6.97 million a year earlier, the National Association of Realtors said Tuesday. Economists expected sales to drop to a rate of 6.65 million.
"It's just a sign that the housing market is slowing and it is not falling off a cliff like some has expected," says Gina Martin, a Wachovia economist.
Existing-home sales are a bit of a lagging indicator, since they reflect closings for homes sold in January and February. A more timely indicator of the housing market will come from the new-home sales data released Wednesday.
Wachovia expects total home sales -- existing and new -- to fall 20% total in 2006 and 2007.
The NAR said that March housing inventory levels rose to 3.19 million existing homes for sale, which represents 5.5 months of supply at the current sales pace. That's the highest level since July 1998, when the inventory represented 5.6 months of supply.
In March 2005, there were 2.3 million homes available for sale, representing four months of supply.
The national median existing-home price for all housing types was $218,000 in March, up 7.4% from a year earlier, when the median was $203,000.
"We now see appreciation cooling to single-digit rates of price growth -- another sign that the market is normalizing," David Lereah, the NAR's chief economist, said in a statement.
By region, existing-home sales in the West fell 12.3%, and the median price rose 8.3% to $341,000.
In the Northeast, existing-home sales rose 2.6% from a year ago, and the median price grew 5% year over year to $275,000.
Sales in the Midwest increased 3.8% over a year ago, and the median existing-home price rose 2.6% to $160,000.
In the South, sales rose 1.5% from a year ago. The median price in the South was $181,000, up 6.5% from March 2005.
Homebuilder shares were down Tuesday after the report, with
shedding 3.1% to $38.12 and
dropping 1.8% to $32.87.
Investors also were reacting to a first-quarter earnings miss from
, which reported a 2% drop in net income. The homebuilder reported EPS of $1.14, below Thomson First Call's mean analyst estimate of $1.45.
The company said it was experiencing pricing pressures and higher cancellations in the Washington, D.C. area, and that conditions remain "challenging" in Columbus, Ohio, Indianapolis and Cincinnati. The stock fell 6.3% to $43.20 in morning trading.