WASHINGTON — Existing-home sales declined in March, according to data released Monday that signaled a pause in the market as potential sellers were reluctant to put their homes on the market.
The National Association of Realtors said sales of existing homes fell 0.6 percent in March to a seasonally adjusted annual rate of 4.92 million.
Low inventories of existing homes for sale are constraining activity, according to the NAR. The supply of existing homes available for sale has remained under 2 million since October, and has decreased 17 percent over the past year. Inventories are expected to see a large gain in April as the buying season heats up.
The rate of home sales has stayed in a tight range of 4.9 million to 4.96 million since November. Despite March's decline, sales were up 10.3 percent from the same period in the prior year.
"Sales were a bit weaker than expected, although they are still up solidly over the past year," Jim O'Sullivan, chief U.S. economist with High Frequency Economics, wrote in a research note.
Meanwhile, median prices hit $184,300 in March, up 11.8 percent from the same period in the prior year, the largest year-over-year price growth since November 2005. Low inventories are supporting prices, and the median price has benefited from less distressed home activity, the NAR said.
Distressed homes made up 21 percent of sales in March — the lowest share since data collection began in 2008 — down from 29 percent during the same period in the year before.
Monday's report is the latest data signaling a housing market that has grown substantially over the past year, supported by near-record-low interest rates and rising prices. But head winds remain from high unemployment and tight credit standards. For instance, higher standards are affecting young workers with student debt.
"First-time buyers are struggling to get into the market," said Lawrence Yun, NAR's chief economist.
Economists polled by MarketWatch had expected a pace of 5.03 million existing-home sales for March, compared with an original estimate of a 4.98 million rate in February. On Monday, NAR revised February's rate to 4.95 million.
Regionally, the pace of existing-home sales fell 1.7 percent in the West and 1.5 percent in the South. The pace was unchanged in the Northeast. The sales rate rose 1.8 percent in the Midwest.
A recent reading on sentiment among home builders showed a decline in April, as the index hit the lowest level in six months, dragged down by concerns over present sales and buyer traffic. Despite builders' concerns, the Department of Commerce recently reported that construction on new U.S. homes in March hit the highest rate in almost five years, led by apartments.