Existing home sales rise 1%

Sales of existing homes and condominiums rose by 1 percent in March to the third-highest sales pace on record while the nationwide median price jumped by the largest amount in more than 14 years, a real estate trade group reported Monday.

The National Association of Realtors reported that existing home sales rose to a seasonally adjusted annual rate of 6.89 million units last month, up from a February sales pace of 6.82 million units.

The increase was far above the tiny 0.1 percent gain that economists had been expecting, indicating that the modest increase in mortgage rates so far this year has not put a damper on home sales.

In Metro Detroit, sales were up 18.3 percent over a year ago with 4,214 units sold compared to 3,561 in March 2004 with a median sale price of $160,000, according to Realcomp II Ltd., a Farmington Hills-based computer service. The number of local listings were up 4.7 percent with 12,743 units on the market last month.

Nationally, the median price for a home sold in March rose to $195,000, a gain of 11.4 percent from the sales price a year ago. That was the biggest year-over-year gain since December 1980, a period when surging inflation was pushing home prices upward.

It marked the third consecutive monthly double-digit gain in prices from a year ago, and industry experts said it indicated in part a lack of available supply to meet demand.

"We'd really like to see a bigger supply of homes so people don't feel pressured when making purchase decisions or contract offers," said Al Mansell, president of the Realtors group and head of Coldwell Banker Residential Brokerage in Salt Lake City.

While mortgage rates were rising modestly last month, going from 5.69 percent for a 30-year mortgage at the end of February to 6.04 percent at the end of March, they have since slipped back, standing at 5.80 percent last week, according to a nationwide survey by Freddie Mac.

"It appears that it will take much higher rates to dampen the spirits of home buyers," said Joel Naroff, head of an economic consulting firm in Holland, Pa.

The 1 percent increase in sales followed no change in February and a tiny 0.1 percent increase in January. The seasonally adjusted annual sales rate of 6.89 million units was the third-highest on record, trailing only a 7.02 million pace of home sales last June and a 6.98 million sales pace last November.

The 1 percent increase stemmed from a 1.2 percent gain in sales of single-family homes, which rose to an annual rate of 6.04 million units. Sales of condominiums and co-ops edged down 0.1 percent to 845,000 units in March.