Existing-home sales bounced back in February after two straight months of declines, according to the National Association of Realtors.
Total existing-home sales grew 3.0% to a seasonally adjusted annual rate of 5.54 million in February from 5.38 million in January. Sales were 1.1% ahead of a year earlier.
February existing-home sales in the Northeast fell 12.3% to an annual rate of 640,000, and are now 7.2% below a year ago. The median price in the Northeast was $258,900, which is 3.6% above February 2017. In the Midwest, existing-home sales dipped 2.4% to an annual rate of 1.22 million in February (unchanged from a year ago). The median price in the Midwest was $179,400, up 4.5% from a year ago. Existing-home sales in the South jumped 6.6% to an annual rate of 2.41 million in February, and are now 3.4% above a year ago. The median price in the South was $215,700, up 5.4% from a year ago. Existing-home sales in the West surged 11.4% to an annual rate of 1.27 million in February, and are now 2.4% above a year ago. The median price in the West was $370,600, up 9.6% from February 2017.
Lawrence Yun, NAR chief economist, said sales were uneven across the country in February but did increase overall. “A big jump in existing sales in the South and West last month helped the housing market recover from a two-month sales slump,” he said. “The very healthy U.S. economy and labor market are creating a sizeable interest in buying a home in early 2018. However, even as seasonal inventory gains helped boost sales last month, home prices – especially in the West – shot up considerably. Affordability continues to be a pressing issue because new and existing housing supply is still severely subpar.”
Added Yun, “The unseasonably cold weather to start the year muted pending sales in the Northeast and Midwest in January and ultimately led to their sales retreat last month. Looking ahead, several markets in the Northeast will likely see even more temporary disruptions from the large winter storms that have occurred in March.”
The median existing-home price for all housing types in February was $241,700, up 5.9% from February 2017 ($228,200). February’s price increase marks the 72nd straight month of year-over-year gains.
Total housing inventory at the end of February rose 4.6% to 1.59 million existing homes available for sale, but is still 8.1% lower than a year ago (1.73 million) and has fallen year-over-year for 33 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace (3.8 months a year ago).
Properties typically stayed on the market for 37 days in February, which is down from 41 days in January and 45 days a year ago. Forty-six% of homes sold in February were on the market for less than a month.
“Mortgage rates are at their highest level in nearly four years, at a time when home prices are still climbing at double the pace of wage growth,” said Yun. “Homes for sale are going under contract a week faster than a year ago, which is quite remarkable given weakening affordability conditions and extremely tight supply. To fully satisfy demand, most markets right now need a substantial increase in new listings.”
Realtor.com®’s Market Hotness Index, measuring time-on-the-market data and listings views per property, revealed that the hottest metro areas in February were San Francisco-Oakland-Hayward, Calif.; Midland, Texas; Vallejo-Fairfield, Calif.; San Jose-Sunnyvale-Santa Clara, Calif.; and Sacramento-Roseville-Arden-Arcade, Calif.
First-time buyers were 29% of sales in February, which is unchanged from last month and down from 31% a year ago. NAR’s 2017 Profile of Home Buyers and Sellers – released in late 2017 – revealed that the annual share of first-time buyers was 34%.
All-cash sales were 24% of transactions in February, up from 22% in January and the highest since last February (27%). Individual investors, who account for many cash sales, purchased 15% of homes in February, which is down from 17% in January and unchanged from a year ago.
Distressed sales were 4% of sales in February, down from 5% in January and 7% a year ago. 3% of February sales were foreclosures and 1% were short sales.
Single-family home sales rose 4.2% to a seasonally adjusted annual rate of 4.96 million in February from 4.76 million in January, and are now 1.8% above the 4.87 million pace a year ago. The median existing single-family home price was $243,400 in February, up 5.9% from February 2017.
Existing condominium and co-op sales declined 6.5% to a seasonally adjusted annual rate of 580,000 units in February, and are now 4.9% below a year ago. The median existing condo price was $227,300 in February, which is 5.7% above a year ago.
