US home sales roared back to life in March

WASHINGTON (AP) — U.S. homebuyers flooded back into the real estate market in March, pushing up sales and prices at the start of the spring buying season.

Sales of existing homes jumped 6.1 percent last month to a seasonally adjusted annual rate of 5.19 million, the National Association of Realtors said today.

Home purchases recovered after setting a weak pace in January and February, when an extremely cold and snow-filled winter cut into purchases. Relatively low mortgage rates and robust hiring has raised expectations that sales will improve after slipping slightly in 2014.

But the surge in sales has yet to cause a meaningful increase in listings. The market has just 4.6 months of supply, compared to six months in what economists consider to be a healthy market. The limited supplies have caused prices to rise at a level that hurts affordability. Median home prices increased 7.8 percent over the past 12 months to $212,100.

This sets up a tension between rising demand and limited supplies. In order to build on the current sales momentum, more houses need to be listed, said Richard Moody, chief economist at Regions Financial.