In March, sales of existing U.S. homes plunged to their lowest level since July 2012. According to the National Association of Realtors, sales dropped by .2% to an adjusted rate of 4.59 million. The slip represented the seventh time in eight months that numbers have gone down.
In January and February, sales were hindered by the severe winter weather, but the market seems to be recovering from winter storms.
“Sales appear to be stabilizing following earlier weather-related disruptions,” said Joseph LaVorgna, an economist at Deutsche Bank. “We expect sales to improve as we enter the crux of the spring selling season.”
But though the effects of storms and frigid temperatures might be wearing off, there is plenty of concern about the health of the housing market. There are other underlying factors that have contributed to the drop in sales.
“At least part of the net weakening likely reflects weather effects, although, even without weather effects, sales have clearly slowed since early last year,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.
Some of the factors that have discouraged potential buyers include a slim inventory of available homes, high prices, tough lending standards, and increasing borrowing costs. However, the outlook remains relatively positive for the remainder of 2014.
“Sales may be stabilizing,” said Lawrence Yun, chief economist at the National Association of Realtors . “I do expect some spring bounce in the coming months.”
Despite the slow start to the year, experts are expressing optimism.
The housing market “still has far to go,” said Fed Chairwoman Janet Yellen said last week. But “it seems to have turned a corner.”