U.S. home sales bounce back in March after harsh winter in many regions

U.S. homebuyers flooded back into the real estate market in March, pushing up sales and prices at the start of the spring buying season.

Sales of existing homes hit a seasonally adjusted annual rate of 5.19 million, up 10.4 percent from a year ago, the National Association of Realtors said Wednesday. In the Kansas City market, 2,483 sales of existing homes closed in March, up 17 percent from a year ago.

Nationally, median home prices increased 7.8 percent over the past 12 months to $212,100. In the Kansas City market the median existing home sales price was up 11.1 percent, to $150,000. By contrast, average U.S. pay has risen just 2.1 percent over that time.

Nationally, the pace also was up 6.1 percent from February. January and February sales were depressed by unusually harsh winter weather in many parts of the country. Much of last month’s sales growth came from the Northeast and Midwest — the areas that were hardest hit by winter storms and that were bound to recover as the weather warmed. So it’s possible that the March increase might amount to just a one-month blip.

That possibility makes next week’s release of the Realtors’ monthly report on pending home sales — which covers upcoming purchases — a crucial barometer of the industry’s strength.

On top of that, there might not be enough homes on the market to meet buyer demand. A shortage of available homes would limit sales.

Nationally, the real estate market has just 4.6 months of supply, compared with six months in what economists consider a healthy market. The limited supply has caused prices to rise at a pace that hurts affordability.

That sets up a tension between rising demand and limited availability of homes. To build on the current sales momentum, more houses must be listed, said Richard Moody, chief economist at Regions Financial.

Still, job gains over the past year mean that there are an additional 3.1 million people working who have paychecks to spend. This has increased confidence within the real estate sector of a sales surge this year.

Relatively low mortgage rates should also help buyers. The average 30-year fixed rate was 3.67 percent last week, according to the mortgage giant Freddie Mac. The average has plummeted from a 52-week high of 4.33 percent.

This story was originally published April 22, 2015 at 6:19 PM with the headline "U.S. home sales bounce back in March after harsh winter in many regions."