That Darn Weather!

Daily Real Estate News  |  April 24, 2007

Weather Curtails March Existing-Home Sales
Winter weather reduced home shopping in February, slowing March sales. The pace of sales was likely further dampened by a decrease in subprime lending, 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 rate of 6.12 million units in March. That compares to a pace of 6.68 million in February, and is 11.3 percent below the 6.90 million-unit level in March 2006.

“For the last couple months we’ve been expecting a weather ‘hit’ on home sales,” says David Lereah, NAR’s chief economist. “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.”

Lereah says the market may also be experiencing some of 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,” Lereah says. “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.”