MADISON, NJ—Realogy Holdings Corp., owner of the Coldwell Banker, Century 21 and Soheby’s International residential brokerage brands, posted a wider-than-expected loss for the first quarter on industry-wide declines in mortgage refinancing as well as a year-over-year slide in its own transaction volume. The Madison, NJ-based holding company, which operates 13,600 owned and franchised offices in 104 countries, posted a net loss of $46 million, or 32 cents per share; analysts polled by Thomson Reuters had predicted a loss averaging 19 cents per share. However, the net loss was down more than 33% Y-O-Y from $75 million in Q1 2013.

“We saw two opposing trends in the first quarter that caused an overall shift in Realogy’s mix of business resulting in a higher average sale price and reduced transaction sides,” says CEO Richard Smith. “Demand at the higher price points in markets served by our franchisees and company-owned brokerages was strong, while difficult credit standards and rapid home price appreciation, primarily caused by low inventory levels, constrained activity at the entry level of the housing market.” The average sale price rose 13% Y-O-Y, while volume eroded by 3%.

On a conference call with analysts Monday morning, Smith said 2014 could be “a challenging year, especially if transaction volume growth continues to slow throughout the prime selling season.” Compounding the challenges of low inventory at the first-time homebuyer and move-up buyer levels are “tough credit underwriting and the effects of a sluggish economy, which we believe has slowed demand.”

The company expects refinancing volume to remain constrained through the balance of the year, and Q2 home sales volume to be off between 5% and 7% across both its franchised and owned units. Conversely, it expects average sale prices to rise by a similar percentage during the quarter.

“As we have moved into our spring selling season, thus far the level of open activity we expected has not materialized, particularly as it relates to home-sale transaction sides,” says Anthony E. Hull, Realogy’s EVP, CFO and treasurer. “Having said that, we expect our aggregate number of home-sale transaction sides to increase sequentially from 260,000 in the first quarter of 2014 to between 367,600 to 375,500 in the second quarter.”