Sales of existing homes in fell 1.0% in March 2008, the National Association of Realtors announced Wednesday, as the prospect of continued home price declines discouraged potential buyers.
The NAR's existing home sales index declined to 83.0 in March 2008. The index totaled a revised 83.8 in February 2008, and stood at 103.9 in March 2007.
Economists surveyed by Bloomberg News had expected the March 2008 existing home sales index to drop to 83.8%.
Regional conditions vary
Conditions varied by region. In the Midwest, the index fell 10.4% in March 2008 to 74.1; in the West, the index fell 1.4% to 91.2, and in the South, it fell 0.1% to 84.9. In the Northeast, the index rose 12.5% to 80.8%.
Further, the NAR now expects the U.S. median home price for existing homes to fall to $213,700 this year, compared to the earlier estimate of $215,800.
The NAR also expects U.S. GDP growth of 1.5% in 2008 and 2.3% in 2009, and sees the U.S. unemployment rate rising to 5.3% in 2008 and to 5.5% in 2009.
Economic Analysis: The report indicates Americans are continuing to delay home purchases, which is a rational given the likely continued decline in home prices, save for a few isolated (and fortunate) markets. The housing sector remains in a pronounced recession -- its worst slump in more than 15 years. Moreover, given the housing sector's relationship to U.S. GDP growth, housing's continued doldrums point to continued overall U.S. economic sluggishness through at least Q2 2008, and most likely through Q3 2008.
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Reader Comments (Page 1 of 1)
5-07-2008 @ 2:58PM
Michael Schneider said...
This result is not too surprising if you believe that there is a big change occurring in the housing industry- a sea change rather than a temporary pullback. In the free Barrel Report (top right) at http://www.Barrelomoney.com some of the arguments for a sea change in housing are highlighted. Housing has been good for many years so it may take awhile before a more positive outlook appears. Unfortunately, this means housing will drag on the economy perhaps for some time to come.