The payment: Existing home sales declined in February after the volume of properties sold increased for two consecutive months.
Total portfolio sales decreased 6.6% from January to a seasonally adjusted annual rate of 6.22 million, the National Association of Realtors reported on Monday. Compared to the previous year, home sales increased by 9.1%.
“Despite the fall in home sales in February – which I would attribute to historically low inventory levels – the market is still outperforming pre-pandemic levels,” said Lawrence Yun, chief economist at the National Association of Realtors.
What happened: In the region, home sales declined the most in the Midwest (minus 14.4% compared to January), followed in the Northeast (minus 11.5%). In the west, sales rose by 4.6% per month. Compared to the previous year, sales increased in all regions of the country.
The median price for existing homes was $ 313,000 in February, almost 16% higher than a year ago. The inventory of homes for sale stayed roughly the same between January and February, but was down nearly 30% year over year. As of February, the market had a two-month supply of homes for sale, based on the current selling rate, near an all-time low. A six month delivery is generally viewed as an indication of a balanced market.
The big picture: As with the construction of new homes, the disruptive winter weather in February led to a significant slowdown in home sales, according to economists. “While underlying demand drivers for home sales remain strong, last month’s winter storms have likely had a negative impact on transactions,” said nationwide senior economist Ben Ayers and economist Daniel Vielhaber in a research report prior to April Publication of Home Selling Report.
While last month’s weather events were a slip-up in the scheme of things, there are broader issues that could add to slower-than-expected sales activity in the months ahead. To begin with, inventory remains a serious barrier to the real estate market. ON current report Realtor.com estimates that around 200,000 home sellers have stayed out of the market this year, limiting buyers’ options.
“Buyers are facing a highly competitive spring market and prices continue to rise,” said Danielle Hale, chief economist at Realtor.com. And now that mortgage rates are rising, the question is whether buyers are willing to spend more to become homeowners or will they wait on the sidelines.
What you say: “The monthly repetition of record-low homes for sale is another major revenue limit,” said Michael Gregory, assistant chief economist at BMO Capital Markets, in a research note.