Existing home sales in the U.S. dipped slightly in March, falling for the third straight month and bringing their volumes to lowest levels since July 2012.
Sales of existing, pre-owned homes -- which account for the bulk of the housing market -- fell 0.2 percent in March, nearing its slowest pace in two years, according to the National Association of Realtors. Sales fell to 4.59 million in March, down from 4.6 million in February. Median home prices climbed, but not as fast as they had in recent months, up 7.9 percent to $198,500.
"There really should be stronger levels of home sales given our population growth," said Lawrence Yun, NAR's chief economist, in a statement. "In contrast, price growth is rising faster than historical norms because of inventory shortages."
Yun said that looking at the fundamentals of the market, this slowdown in sales would turn around soon.
"With ongoing job creation and some weather-delayed shopping activity, home sales should pick up, especially if inventory continues to improve and mortgage interest rates rise only modestly," he said.
Inventory showed signs of improvement, with total inventory rising 4.7 percent at the end of March to 1.99 million existing homes available for sale. That's about a 5.2-month supply at the current sales pace; a six-month supply is considered a healthy housing market.
Sales of condominiums, which are cheaper than single-family homes, fell sharply, suggesting challenges at the lower end of the market.
"We also have tight inventory in the lower price ranges where many starter homes are found, but rising new-home construction means some owners will be trading up and more existing homes will be added to the inventory. Hopefully, this will create more opportunities for first-time buyers," said NAR President Steve Brown.
Sales fell most sharply in the West, where regions like Southern California have seen big drops in sales volume compared to last year.