Existing-home sales plummeted 8.4 percent from February (6,680,000 units) to March (6,120,000 units) and 11.3 percent since March 2006 according to a report released by the National Association of Realtors (NAR) Tuesday. Erratic weather across the country and unrest in the mortgage industry are being blamed for the drop.

"For the last couple months we've been expecting a weather 'hit' on home sales finalized in March, but looking at overall activity in the first quarter we see that existing-home sales averaged 6.41 million -- a figure that is moderately higher than the sales pace during the second half of 2006," said David Lereah, NAR's chief economist. "We also may be seeing some losses as a result of the subprime fallout. However, this is masking improved fundamentals in the housing market, with lower mortgage interest rates and motivated sellers."

One analyst, Mark Zandi, chief economist for Moody's Economy.com, said the report is "soft."

"There are weak sales across the country," Zandi told BUILDER Online. "There is nothing positive at all -- just different shades of gray."

Zandi said he doesn't expect a full housing market recovery until late 2008 or 2009. As far as new-homes sales, Zandi said the report just adds pressure to the new-housing market.

"It argues for further declines in construction and pricing," he said.

Existing-home sales regionally fell:

  • Northeast: -8.2 percent from March; -5.1 percent from March 2006
  • Midwest: -10.9 percent from March; -13.7 percent from March 2006
  • South: -6.2 percent from March; -9.7 percent from March 2006
  • West: -9.1 percent from March; -16.7 percent from March 2006