Sales of existing homes in the United States apparently have yet to recover from the Federal Reserve's decision, way back last year, to begin withdrawing stimulus. For the seventh time in eight months, sales of existing homes contracted 0.2% in March to a slightly lower-than-expected annual rate of 4.59 million.
Year-on-year, sales are down 7.5% which is the steepest rate of contraction since May 2011.
Unattractive mortgage rates are only one reason for the sales weakness. Another is high prices which, in stark contrast to the contraction in sales, are up, not down, 7.9% year-on-year. The median price soared in March, up 5.4% to $198,000 U.S.
Low supply is another reason for the sales trouble, though the weakness in sales during March did lift supply, relative to sales, slightly, at 5.2 months vs five months in February.
Regional data show March weakness in the South and West and monthly strength in the Northeast and Midwest. Year-on-year, all four regions show declines.
