Existing-home sales perked up in March

Investors paid cash to grab cheap homes at risk of foreclosure

WASHINGTON — Investors drove up U.S. home sales last month, plunking down cash to grab cheap homes at risk of foreclosure.

But first-time homebuyers, who are crucial to a housing recovery, stayed away.

The National Association of Realtors said Wednesday sales of previously occupied homes rose last month to a seasonally adjusted annual rate of 5.1 million. That’s up 3.7 percent from 4.92 million in February, but the pace is far below the 6 million homes a year that economists say represents a healthy market.

Foreclosures or short sales, when the lender agrees to accept less than is owed on the mortgage, rose to 40 percent of all sales. Deals paid for entirely in cash accounted for 35 percent of all sales. Sales among first-time homebuyers fell to 33 percent.

Earlier this week, the Commerce Department said builders broke ground on more new homes last month, giving the weak U.S. housing market a slight boost at the start of the spring buying season.

Home construction rose 7.2 percent in March from February to a seasonally adjusted 549,000 units, the government said. Building permits, an indicator of future construction, rose 11.2 percent after hitting a five-decade low in February.

Still, the building pace is far below the 1.2 million units a year that economists consider healthy. And March’s improvement came after construction fell in February to its second-lowest level on records dating back more than a half-century.

In February, the median sale price of a home fell to its lowest level in nearly nine years, largely because many of the homes sold were in the foreclosure process.

Sales of previously owned U.S. homes fell unexpectedly sharply in February and prices fell to their lowest in nearly nine years. The median home price dropped 5.2 percent in February from a year earlier to $156,100, the lowest since April 2002.

The Associated Press and Reuters contributed to this report.

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About dherries
Dave and Sally Herries and The RealtyColorado Team - Real Estate Broker serving the metro-Denver area. Offering properties in urban, sub-urban and rural areas. Our mission statement is "Enriching lives through real estate."

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