WASHINGTON (Reuters) - U.S. home sales increased for a second straight month in March amid a rebound in activity in the Northeast and Midwest regions, but a dearth of houses on the market and higher prices remain headwinds as the spring selling season kicks off.
The National Association of Realtors said on Monday that existing home sales rose 1.1 percent to a seasonally adjusted annual rate of 5.60 million units last month. February’s sales pace was unrevised.
Existing home sales, which account for about 90 percent of U.S. home sales, fell 1.2 percent on a year-on-year basis in March. Last month, sales surged 6.3 percent in the Northeast and jumped 5.7 percent in the Midwest, after being weighed down by bad weather in February.
They slipped 0.4 percent in the South, where the bulk of sales activity occurs, and fell 3.1 percent in the West.
There is an acute shortage of homes, especially at the lower end of the market. According to the NAR, sales of houses priced below $100,000 dropped 21 percent in March from a year ago. Sales of properties in the $100,000-$250,000 price range fell 8 percent, while those in the $250,000-750,000 price category increased 4 percent.
The resulting higher house prices and rising mortgage rates are a constraint for first-time buyers, who have been largely priced out of the market. First-time home buyers accounted for 30 percent of transactions last month, up from 29 percent in February, but down from 32 percent year ago.
Economists believe some undecided buyers are rushing into the market to close contracts, fearful of further increases in home prices and mortgage rates. The 30-year