What's the Forecast?

Bret Helenius — Thu, 03 May 2007 17:32:00 GMT

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Weather Hits March Existing-Home Sales After Three Monthly Gains
WASHINGTON, April 24, 2007 - Unusually bad winter weather in February curtailed home shopping, slowing sales that closed in March, which may have been dampened further by a decrease in subprime lending volume, according to the National Association of Realtors®.

After rising for three consecutive months, total existing-home sales – including single-family, townhomes,condominiums and co-ops – fell 8.4 percent to a seasonally adjusted annual rate1 of 6.12 million units in March from a pace of 6.68 million in February, and are 11.3 percent below the 6.90 million-unit level in March 2006.

David Lereah, NAR’s chief economist, expected the drop. “For the last couple months we’ve been expecting a weather ‘hit’ on home sales finalized in March, but looking at overall activity in the first quarter we see that existing home sales averaged 6.41 million – a figure that is moderately higher than the sales pace during the second half of 2006,” he said. “We also may be seeing some losses as a result of the subprime fallout. However, this is masking improved fundamentals in the housing market, with lower mortgage interest rates and motivated sellers.

“It’s too early to measure a significant impact from tighter lending standards, which should moderately dampen activity, but we’re still looking for existing-home sales to gradually improve during the last half of 2007,” Lereah said.

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