Existing home sales in February bounced back after two straight months of declines and despite low inventory, the National Association of Realtors (NAR) said. Total existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 3.0% to a seasonally adjusted annual rate of 5.54 million in February from 5.38 million in January.
That easily beats the median forecast calling for a 5.42 million rate and sales are now 1.1% above a year ago.
“A big jump in existing sales in the South and West last month helped the housing market recover from a two-month sales slump. The very healthy U.S. economy and labor market are creating a sizeable interest in buying a home in early 2018,” Lawrence Yun, NAR chief economist said.
“However, even as seasonal inventory gains helped boost sales last month, home prices – especially in the West – shot up considerably,” he added. “Affordability continues to be a pressing issue because new and existing housing supply is still severely subpar.”
In the Northeast, existing home sales fell 12.3% to an annual rate of 640,000 and are now 7.2% below a year ago. Yet, the median price in the Northeast was $258,900, which is 3.6% above February 2017.
“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,” Mr. Yun added. “Looking ahead, several markets in the Northeast will likely see even more temporary disruptions from the large winter storms that have occurred in March.”
In the Midwest, existing-home sales declined 2.4% to an annual rate of 1.22 million and are 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 rose 6.6% to an annual rate of 2.41 million and are now 3.4% higher than one year ago. The median price in the South was $215,700, up 5.4% on an annual basis.
Existing-home sales in the West took a “big jump” by 11.4% to an annual rate of 1.27 million and are now 2.4% above a year ago. The median price in the West was $370,600, up 9.6% from February 2017.
The median existing-home price for all housing types 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 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).