Sales of existing single-family homes decreased 2.5% to an annual rate of 3.97 million. Purchases of multifamily properties, including condominiums and townhouses, fell to a pace of 510,000 from 530,000.
Purchases declined in three of four U.S. regions, led by a 7.4% drop in the West. They declined 1.7% in the Northeast and 1.1% in the South. Sales were unchanged in the Midwest.
Cash transactions accounted for about 32% of sales, compared with 33% a month earlier. Distressed sales, comprised of foreclosures and short sales in which the lender agrees to a transaction for less than the balance of the mortgage, were 29% of the total, down from 34% in February.
First-time buyers represented 33% all of purchases, little changed from previous months. The “normal” level is about 40%, Yun said.
A measure of housing affordability a month earlier climbed to a record 206.1, according to the Realtors data. A value of 100 means that a family with the national median income has enough to qualify for a median-priced property.
Lower borrowing costs are doing their part. The average rate on a 30-year fixed mortgage fell to 3.88% last week, close to the record-low of 3.87% reached in February, according to Freddie Mac data.
To help hold down borrowing costs like mortgage rates, Federal Reserve policy makers last month said they will continue to swap $400 billion in short-term securities with long-term debt to lengthen the average maturity of the central bank’s holdings, a move dubbed Operation Twist. The program is scheduled to come to a close by the end of June.
Mortgage revenue helped Wells Fargo & Co. and JPMorgan Chase & Co., the two most-profitable banks last year, top first- quarter estimates, the companies reported this month.
“On the housing side, we’re seeing improvement, and we’ve been seeing that for some time, but we’re seeing it more,” Wells Fargo Chairman and Chief Executive Officer John Stumpf said in an April 13 earnings call.
Short sales surpassed foreclosures for the first time in January, the latest month for which figures are available, according to Lender Processing Services Inc. Almost 24% of purchases were short sales in January, compared with 19.7% for sales of foreclosed homes.
Foreclosure filings, including notices of defaults and bank repossessions, fell 16% in the first quarter from a year earlier after lenders under legal scrutiny slowed actions against delinquent homeowners, RealtyTrac Inc. reported this month.
Investors accounted for 21% of purchases last month, down from 23% in February, today’s data showed. Such figures suggest the recovery in housing isn’t broad-based, said Jay McCanless, a housing analyst with Guggenheim Securities LLC in Nashville, Tennessee.
“We’ve seen investors and cash sales continue to be anywhere from 20% to 33% of monthly sales,” McCanless said. “That may be giving the appearance that there’s more activity, more demand for housing than may actually be the case.”