U.S. home sales slip as supply remains tight

WASHINGTON Sales of previously occupied U.S. homes dipped in March as the supply remained tight, though the pace remained ahead of last year's.

The National Association of Realtors said Monday that sales dipped to a seasonally adjusted annual rate of 4.92 million, from 4.95 million in February. February's figure was revised lower.

Sales in March were 10.3 percent higher than a year earlier.

The number of homes for sale rose 1.6 percent to 1.93 million. That is still 16.8 percent below the supply of a year earlier. The Realtors' group says it expects a rising number of homes to become available.

The median price rose 11.8 percent from February to March to $184,300, the biggest one-month gain since 2005. That might have caused some investors to hold off on purchases.

Steady hiring and near-record-low mortgage rates have helped boost home sales. More Americans are moving out on their own after living with friends and family in the recession. That's creating more housing demand.

Sales would have to reach an annual pace of 5.5 million to be considered healthy. First-time buyers, who are critical to a housing recovery, make up only about 30 percent of sales. That's well below the 40 percent typical in a healthy market.

Since the housing bubble burst more than six years ago, banks have imposed tighter credit conditions and required larger down payments. Those changes have left many would-be buyers unable to qualify for super-low mortgage rates.

Mortgage rates dropped last week to near-record lows. The average rate for a 30-year fixed mortgage dropped to 3.41 percent from 3.43 percent. That's not far from the record low of 3.31 percent in November.

Rising demand and short supplies have encouraged builders to boost construction. U.S. builders started work on more than 1 million homes at an annual pace in March, the first time they've topped that threshold in nearly 5 years.