Existing US home sales fall below forecasts in March

Activity in the US housing market slowed a bit more quickly than expected last month led by a big drop in sales in the West.

According to the National Association of Realtors, new home sales fell by 8.5% in March when compared to the month before to reach an annualised pace of 5.27m (consensus: 5.37m).

Despite that, sales were 0.8% higher in comparison to their year earlier level.

Nevertheless, NAR chief economist, Lawrence Yun, sounded an upbeat note, saying: "More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise."

Median existing home sales prices meanwhile rose by 8.0% year-on-year to $280,600.

The inventory of homes available for sale meanwhile increased by 2.7% against February to 1.67m but remained 10.2% below their March 2019 level.

In terms of month's worth of sales, the inventory of homes rose from 3.0 months to 3.4, against the year earlier level of 3.8.

"We have to expect a sharp slowdown over the next few months, but we don’t anticipate a catastrophic drop in prices," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

"Housing weakness now is a consequence of the state of the broad economy; in the previous cycle, it was the cause."