Nation’s existing-home sales rebound 3 percent in February

WASHINGTON — Despite consistently low inventory levels and faster price growth, existing-home sales in the U.S. bounced back in February after two straight months of declines, according to the National Association of Realtors. Sizable sales increases in the South and West offset declines in the Northeast and Midwest.

Total existing-home sales, which are completed transactions that include singlefamily homes, townhomes, condominiums and co-ops, grew 3.0 percent to a seasonally adjusted annual rate of 5.54 million in February, up from 5.38 million in January. After last month’s increase, sales are now 1.1 percent above a year ago.

Lawrence Yun, chief economist for the NAR, said sales were uneven across the country in February but that they did increase nicely 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,” Yun said.

“The very healthy U.S. economy and labor market are creating a sizable interest in buying a home in early 2018,” he said. “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.”

Inclement weather played a pivotal role in the housing market in parts of the nation.

“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,” Yun said. “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 percent from February 2017 ($228,200). February’s price increase marks the 72nd straight month of yearover-year gains.

Total housing inventory at the end of February rose 4.6 percent to 1.59 million existing homes available for sale, but inventory is still 8.1 percent 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).

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage moved higher for the fifth straight month to 4.33 percent in February (highest since 4.34 percent in April 2014) from 4.03 percent in January. The average commitment rate for all of 2017 was 3.99 percent.

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 percent 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,” Yun said.

“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,” he said. “To fully satisfy demand, most markets right now need a substantial increase in new listings.”

According to Realtor.com’s Market Hotness Index, which measures timeondata and listings views per property, the hottest metro areas in February were San Francisco-OaklandHayward, California; Midland, Texas; Vallejo-Fairfield, California; San JoseSunnyvale-Santa Clara, California; and Sacramento-Roseville-Arden-Arcade, California.

First-time homebuyers accounted for 29 percent of sales in February, which is unchanged from last month and down from 31 percent a year ago. The NAR’s 2017 Profile of Home Buyers and Sellers (released in late 2017) revealed that the annual share of first-time buyers was 34 percent.

NAR President Elizabeth Mendenhall, a sixth-generation Realtor from Columbia, Missouri, and CEO of RE/MAX Boone Realty, said first-time buyers are seeing stiff competition for the available listings in their price range.

“Realtors in several markets note that entry-level homes for first-timers are hard to come by, which is contributing to their underperforming share of overall sales to start the year,” Mendenhall said.

“Prospective buyers should start conversations with a Realtor now on what they want in a new home,” she said. “Even with the expected uptick in new listings in coming months, buyers in most markets will likely have to act fast on any available listing that checks all their boxes.”

All-cash sales were 24 percent of transactions in February, which is up from 22 percent in January and the highest since last February (27 percent). Individual investors, who account for many cash sales, purchased 15 percent of homes in February, which is down from 17 percent in January and unchanged from a year ago.

Distressed sales — which include foreclosures and short sales — were 4 percent of sales in February, down from 5 percent in January and 7 percent a year ago. Three percent of February sales were foreclosures, and 1 percent were short sales.

SINGLE-FAMILY, CONDO/CO-OP SALES Single-family home sales rose by 4.2 percent to a seasonally adjusted annual rate of 4.96 million in February from 4.76 million in January and are now 1.8 percent above the 4.87 million pace a year ago. The median existing single-family home price was $243,400 in February, up 5.9 percent from February 2017.

Existing condominium and co-op sales declined 6.5 percent to a seasonally adjusted annual rate of 580,000 units in February and are now 4.9 percent below a year ago. The median existing condo price was $227,300 in February, which is 5.7 percent above a year ago.

REGIONAL BREAKDOWN February’s existing-home sales in the Northeast fell 12.3 percent to an annual rate of 640,000 and are now 7.2 percent below a year ago. The median price in the Northeast was $258,900, which is 3.6 percent above February 2017.

In the Midwest, existing-home sales dipped 2.4 percent 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 percent from a year ago.

Existing-home sales in the South jumped 6.6 percent to an annual rate of 2.41 million in February and are now 3.4 percent above a year ago. The median price in the South was $215,700, up 5.4 percent from a year ago.

Existing-home sales in the West surged 11.4 percent to an annual rate of 1.27 million in February and are now 2.4 percent above a year ago. The median price in the West was $370,600, up 9.6 percent from February 2017.

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