The recovering housing market took a break in March as sales of existing homes dipped 0.6 percent to a seasonally adjusted annual rate of 4.92 million units, according to the National Association of Realtors. However, March's median price of $184,300 is 11.8 percent higher than a year ago and the highest since November 2005.
The low inventory of existing homes for sale is partly the reason for the price increases, though supply is edging up. In March, the inventory of for-sale homes rose 1.6 percent, and Lawrence Yun, economist at the National Association of Realtors, expects more homes to come on the market this spring when buyers traditionally emerge.
"Buyer traffic is 25 percent above a year ago when we were already seeing notable gains in shopping activity," Yun noted in a statement. He added that in order to reach the six-month supply of inventory that signifies a balanced market between buyers and sellers, new construction will have to accelerate. In March, inventory stood at a 4.7-month supply.
In another bit of positive news, sales of distressed homes -- those in foreclosure or short sale -- dropped from 25 percent of existing-home sales in February to 21 percent in March. The National Association of Realtors says that's the lowest percentage since it began tracking those sales in 2008.
Keep up with your wealth and mortgages, and follow me on Twitter @JudyMartel.