March housing goes out like a lamb

WASHINGTON—In spite of interest and mortgage rates at near historical lows, the broad U.S. housing market sputtered and took a breather during March, losing ground across the board.

Declines were posted in all three segments of the housing sector: existing home sales fell by 8.3 percent; housing starts declined by 7.8 percent; and new home sales were off by 3.1 percent, the Commerce Department reported.

The March losses more than offset some of the gains made the month before, when new home sales climbed by 5.3 percent and housing starts moved up by 2.8 percent. But it was a second straight monthly decline for existing home sales, following a revised drop of 2.6 percent the month before.

But the slowdown wasn't unexpected, said David Lereah, chief economist of the National Association of Realtors. "We were truly at a breakneck pace for home sales in January and February, likely the result of unseasonably mild weather, so it comes as no surprise to see sales decline to a more sustainable pace," he said. Despite the two straight months of decline in the big market for resales, he noted, "home sales activity in March is still the sixth strongest on record, and the monthly pace is higher than our sales forecast total for the year."

Housing starts fell off by 7.8 percent during the month, the weakness concentrated in single-family homes, where sales tumbled at a double-digit pace, declining by 11.4 percent. But the multi-family housing market continued to strengthen, with sales improving by 7.4 percent during March.