Behind the small decline in overall home sales in March were several pieces of good news. Sales of new homes rose, an increasing share of total home sales took place under non-distressed conditions, and mortgage demand improved. Finally, the increase in the inventory of homes for sale left would-be buyers with more choice and is a net positive for the housing recovery at this stage. Admittedly, it might ease the upward pressure on house prices a bit, but the months’ supply of unsold stock still looks consistent with double-digit price gains.
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