Sales of existing homes are expected to rise in March, falling in line with the housing recovery over the past year.
Economists surveyed by Bloomberg predict existing home sales rose 0.6 percent in March, to an annual rate of 5.01 million. The National Association of Realtors will release the report at 10 a.m. Eastern on Monday.
If the predictions ring true, existing home sales at that level would be up 12 percent from a year ago and at their highest point since November 2009.
“Better demand, higher prices – these are good ingredients for the housing market to continue to rise,” said Krishen Rangasamy, senior economist at the National Bank of Canada.“The worst is definitely behind us.”
Prices have risen consistently from January 2012, signaling a healthy recovery in the market. In February, the national median home priced reached $173,000, 12 percent higher than the year before.
With homes prices gaining speed, many homeowners who were waiting for the market to get better are expected to start putting their homes up for sale, especially in this spring selling season.
“Folks are feeling a bit more confident of where the housing market is moving,” said Anika Khan, senior economist at Wells Fargo.
On Thursday, Gallup released a poll that found that more than half of Americans expect home prices to rise around in the area where they live. It was the first time since 2007 the survey found confidence in the market above 50 percent.
Despite recent lulls in retail sales and manufacturing, demand for homes remain strong. The market continues to be supported by the Federal Reserve keeping interest rates low. The interest rate for a 30-year fixed mortgage was 3.57% in March, according to Freddie Mac.
Meanwhile, inventory has declined in recent months, driving builders to construct new homes. In March, new-home construction was at the highest level since June 2008, up 7 percent in March from February to a seasonally adjusted rate of 1.04 million, the Census Bureau reported Tuesday. That’s 47 percent higher than a year ago.
In markets like Portland, inventory is at a 3.2-month supply, far below the healthy 6-month supply. Though low inventory can be frustrating for potential homebuyers who have little to choose from, it’s not bad sign for the market.
“It’s not the type of negative we’re worried about, which is a weak economy,” Rangasamy said.
Cities that were hit hardest by the recession, like Phoenix and Atlanta, have been making large strides in the market in the past year and have seen inventory fall as demand has picked up.
“It’s really tightened up because sellers haven’t caught up with the fact that there are buyers out there,” said Dave Herren, a real estate agent in Atlanta.
But as the weather begins to warm up and the spring selling season begins, many economists believe that more sellers will come into the market. The spring selling season is expected to propel the market to maintain its upward trend through the rest of the 2013.