Despite the beginning of the traditionally busy spring market, existing home sales declined slightly in March, owing primarily to continuing tight inventories according to the National Association of Realtors® (NAR).  Existing homes, which include single family houses, condominium units, and cooperative apartments, sold at a seasonally adjusted annual rate of 4.92 million during the month, down 0.6 percent from the February rate of 4.95 million but still 10.3 percent above the 4.46 million unit pace one year earlier.  March was the 21^st consecutive month in which sales were higher than during the same period one year earlier, but also the 5th consecutive month stuck between 4.9 and 5 million.

Sales of single-family homes were down 0.2 percent to a seasonally adjusted annual rate of 4.32 million compared to 4.33 million in February but were 9.1 percent higher than in March 2012.  Condo and co-op sales fell 3.2 percent to 600,000 units from 620,000 units the previous month, still 20 percent above the rate one year before.

The national median existing-home price for all housing types was $184,300, 11.8 percent higher than a year earlier and the strongest increase since a November 2005 annual increase of 12.9 percent.  It was also the 13th consecutive months of year-over-year price increases which last happened during the May 2005 to May 2006 period.  The median existing single-family home price was $185,100, an annual increase of 12.1 percent and condo prices were at a median of $178,900, 10.4 percent above March 2012.

Lawrence Yun, NAR chief economist, said demand is outstripping supply in the current market. "Buyer traffic is 25 percent above a year ago when we were already seeing notable gains in shopping activity.  In the same timeframe housing inventories have trended much lower, which is continuing to pressure home prices. The good news is home construction is rising and low mortgage rates are continuing to keep affordability conditions at historically favorable levels. The bad news is that underwriting standards remain excessively tight, while renters are getting squeezed by higher rents."

Total housing inventory at the end of March was up 1.6 percent to 1.93 million available existing homes, a 4.7-month supply at the current sales pace, up from 4.6 months in February.  Listed inventory remains 16.8 percent below a year ago when there was a 6.2-month supply.

"The inventory improvement last month results from a seasonal gain, but conditions continue to broadly favor sellers," Yun said.  "We need a housing supply of over 6 months to have a generally balanced market between home buyers and sellers, but it's unlikely we'll get there without greater increases in housing construction."

Total Distressed Sales fell to 21 percent with thirteen percent of March sales accounted for by foreclosures and 8 percent short sales.  Distressed sales took a 25 percent market share in February and 29 percent in March 2012.  Foreclosures sold for an average discount of 15 percent in March, while short sales were discounted 13 percent.

The homes that sold were on the market for a median of 62 days compared to 74 days in February and 91 days in March 2012.  Short-sales took a median 81 days to sell and foreclosures 46 days.  Non-distressed homes required a median marketing period of 66 days and 37 percent of all homes sold during the month did so in less than one month.

NAR President Gary Thomas said, "The typical home sold in March was on the market for one month less than it took to sell a year ago.  Multiple bidding is becoming more common, and more homes are selling above the asking price, so buyers need to move quickly and follow their Realtor^'s advice for contingencies when making contract offers."

First-time buyers accounted for 30 percent of purchases in March, unchanged from February; they accounted for 33 percent in March 2012.  Investors purchased 19 percent of homes compared to 22 percent in February and 21 percent a year earlier.  All cash sales, which are usually sales to individual investors, accounted for 30 percent of transactions, two percentage points less than in both of the earlier periods.

Regionally, existing-home sales in the Northeast were unchanged at an annual rate of 630,000 in March and were 6.8 percent above March 2012. The median price in the Northeast was $237,000, up 3.0 percent from a year ago.

Existing-home sales in the Midwest rose 1.8 percent in March to a pace of 1.16 million and were 14.9 percent above a year ago. The median price in the Midwest was $141,800, a 7.8 percent annual increase.

In the South, existing-home sales slipped 1.5 percent to an annual level of 1.95 million in March but were 12.7 percent above March 2012. The median price in the South was $161,700, up 10.4 percent on an annual basis.

Existing-home sales in the West declined 1.7 percent to a pace of 1.18 million in March but are 4.4 percent above a year ago. With notably constrained inventory conditions, the median price in the West rose to $258,100, up 26.1 percent from March 2012.