Sales of existing homes nationwide in March hit the lowest level since June 2004. The drop from the month before, an 8.4 percent decrease, measured the biggest drop in sales since January 1989. The data was released today by the National Association of Realtors.
David Lereah, NAR’s chief economist, attributed the drop to extreme weather conditions in some places in the country in February. His sense is that if people are snowed in, they’re unlikely to step out on a Sunday afternoon to check out an open house.
But other economists say the numbers just add to the string of bad news hitting the nation’s housing markets, including increased foreclosures, growing unease with lending practices popularized in the boom, and dropping prices.
From a MarketWatch story on the news:
“The U.S. housing correction has yet to reach bottom,” wrote Sal Guatieri, an economist for BMO Nesbitt Burns. “The key risk remains that further declines in home prices will eventually undermine consumer spending, tipping the economy downwards.”
The NAR release coincided with a report from the Conference Board, a group that measures consumer confidence. That group’s April survey showed a second consecutive monthly drop.
From the Conference Board’s press release, a statement from Director Lynn Franco:
“Unlike the decline in March, which was solely the result of apprehension about the short-term outlook, this month’s decline was a combination of weakening expectations and a less favorable assessment of present-day conditions. Rising prices at the gas pump continue to play a key role in dampening consumers’ short-term expectations.”