Sales of previously owned homes in the U.S. fell in March as loan restrictions and the prospect of further price declines kept buyers away.
Purchases dropped 2 percent, less than forecast, to an annual rate of 4.93 million, from 5.03 million in February, the National Association of Realtors said today in Washington. The median sales price fell 7.7 percent from a year earlier.
Defaults on subprime mortgage loans have led banks to tighten borrowing rules, while home values are decreasing as foreclosures add to the glut of unsold properties. The housing slump, now in its third year, is one reason some Federal Reserve policy makers are concerned the U.S. is heading into a recession.
“The declines will persist through 2008,” Avery Shenfeld, senior economist at CIBC World Markets Inc. in Toronto, said before the report. “To see a consistent upturn in sales and prices, we’re going to need to work through the slump in housing and the crisis in the credit market. That will take time.”
Resales were forecast to fall 2.3 percent to a 4.92 million annual rate, according to the median projection of 72 economists in a Bloomberg News survey. Estimates ranged from 4.8 million to 5.08 million.
Sales fell 19.3 percent in March compared with a year earlier. Resales averaged 5.67 million in 2007.
The number of homes for sale at the end of March increased by 40,000 to 4.06 million. At the current sales pace, that represented 9.9 months’ worth, up from 9.6 months’ worth at the end of the prior month.
The median price of an existing home dropped to $200,700 from $217,400 a year earlier.