Existing Home Sales Break 12-Month Slide
Existing home sales rose in February, marking the first monthly increase in a year, the National Association of Realtors reported Tuesday.
NAR said total existing-home sales (https://www.nar.realtor/existing-home-sales) jumped by 14.5% from January to a seasonally adjusted annual rate of 4.58 million in February, the largest monthly percentage increase since July 2020. Year-over-year, sales fell by 22.6% (down from 5.92 million in February 2022).
Single-family home sales rose to a seasonally adjusted annual rate of 4.14 million in February, up by 15.3% from 3.59 million in January but down 21.4% from the previous year. The median existing single-family home price fell to $367,500 in February, down 0.7% from February 2022. Existing condominium and co-op sales rose to a seasonally adjusted annual rate of 440,000 units in February, up from 410,000 in January but down 32.3% from one year ago. The median existing condo price rose to $321,000 in February, an annual increase of 2.5%.
Month-over-month sales rose in all four major U.S. regions, although they also posted year-over-year declines. Sales in the Northeast rose by 4.0% from January to an annual rate of 520,000 in February but fell by 25.7% from February 2022. The median price in the Northeast fell to $366,100, down 4.5% from the previous year. In the Midwest, sales rose by 13.5% from January to an annual rate of 1.09 million in February, but fell by 18.7% from one year ago. The median price in the Midwest rose to $261,200, up 5.0% from February 2022.
Sales in the South jumped by 15.9% in February from January to an annual rate of 2.11 million, but fell by 21.3% from a year ago. The median price in the South rose to $342,000, an increase of 2.7% from one year ago. In the West, sales jumped by 19.4% in February to an annual rate of 860,000 but fell by 28.3% from the previous year. The median price in the West fell to $541,100, down 5.6% from February 2022.
“Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines,” said NAR Chief Economist Lawrence Yun. “Moreover, we’re seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs.”
“Lower mortgage rates early this year drove a turnaround in mortgage applications for purchase and pending home sales, which presaged the surge in resales,” said Charlie Dougherty, Economist with Wells Fargo Economics, Charlotte, N.C. February’s 14.5% surge in resales blew past consensus expectations and marked the largest monthly jump since December 2015, excluding the pandemic era. The recent turnaround in mortgage purchase applications for purchase and pending home sales were early evidence that lower mortgage rates would help bring an end to the year-long trend of declining existing home sales.”
The report said total housing inventory held at 980,000 units, identical to January and improved by 15.3% from one year ago (850,000). Unsold inventory sits at a 2.6-month supply at the current sales pace, down 10.3% from January but up from 1.7 months in February 2022.
“Inventory levels are still at historic lows,” Yun said. “Consequently, multiple offers are returning on a good number of properties.”
NAR said the median existing home price3 for all housing types in January fell to $363,000, a decline of 0.2% from February 2022 ($363,700), as prices climbed in the Midwest and South yet fell in the Northeast and West. This ends a streak of 131 consecutive months of year-over-year increases, the longest on record.
Properties typically remained on the market for 34 days in February, up from 33 days in January and 18 days in February 2022. Fifty-seven percent of homes sold in February were on the market for less than a month.
First-time buyers were responsible for 27% of sales in February, down from 31% in January and 29% a year ago. All-cash sales accounted for 28% of transactions in February, down from 29% in January but up from 25% in February 2022. Individual investors or second-home buyers purchased 18% of homes in February, up from 16% in January but down from 19% in February 2022.
Distressed sales represented 2% of sales in February, nearly identical to last month and one year ago.