Existing-home sales fade 7.2 percent in February

WASHINGTON — Existing-home sales dipped in February, continuing a seesawing pattern of gains and declines over the past few months, according to the National Association of Realtors. Each of the four major U.S. regions saw sales fall on a month-over-month basis in February. Sales activity year over year was also down overall, though the South experienced an increase, while the remaining three regions reported drops in transactions.

Total existing-home-sales completed transactions that include single-family homes, townhomes, condominiums and co-ops sank 7.2 percent from January to a seasonally adjusted annual rate of 6.02 million in February. Year over year, sales decreased 2.4 percent (6.17 million in February 2021).

“Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases,” said Lawrence Yun, NAR’s chief economist. “Some who had previously qualified at a 3 percent mortgage rate are no longer able to buy at the 4 percent rate.

“Monthly payments have risen by 28 percent from one year ago — which interestingly is not a part of the consumer price index — and the market remains swift with multiple offers still being recorded on most properties.”

Total housing inventory at the end of February totaled 870,000 units, up 2.4 percent from January and down 15.5 percent from one year ago (1.03 million). Unsold inventory sits at a 1.7-month supply at the current sales pace, up from the record-low supply in January of 1.6 months and down from 2.0 months in February 2021.

Yun notes that rising rates and escalating prices have prevented many consumers from making a purchase.

“The sharp jump in mortgage rates and increasing inflation are taking a heavy toll on consumers’ savings,” he said. “However, I expect the pace of price appreciation to slow as demand cools and as supply improves somewhat due to more home construction.”

The median existing-home price for all housing types in February was $357,300, up 15.0 percent from February 2021 ($310,600) as prices grew in each region. This marks 120 consecutive months of year-over-year increases, the longest-running streak on record.

Properties typically remained on the market for 18 days in February, down from 19 days in January and 20 days in February 2021. Eightyfour percent of homes sold in February 2022 were on the market for less than a month.

First-time buyers were responsible for 29 percent of sales in February, up from 27 percent in January and down from 31 percent in February 2021. NAR’s 2021 Profile of Home Buyers and Sellers — released in late 2021 — reported that the annual share of first-time buyers was 34 percent.

Individual investors or second-home buyers, who make up many cash sales, purchased 19 percent of homes in February, down from 22 percent in January but up from 17 percent in February 2021. All-cash sales accounted for 25 percent of transactions in February, down from 27 percent in January and up from 22 percent in February 2021.

Distressed sales — foreclosures and short sales — represented less than 1 percent of sales in February, equal to the percentage seen in both January 2022 and February 2021.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.76 percent in February, up from 3.45 percent in January. The average commitment rate across all of 2021 was 2.96 percent.

Realtor.com’s Market Trends Report in February shows that the greatest year-over-year median-list-price growth occurred in Las Vegas (+39.6 percent), Miami (+31.6 percent) and Tampa, Florida (+31.5 percent). Austin, Texas, posted the highest growth in the share of homes that had their prices reduced compared to last year (+3.3 percentage points), followed by Milwaukee (+2.1 percentage points), Pittsburgh and Baltimore (+1.4 percentage points each).

SINGLE-FAMILY AND CONDO/CO-OP SALES

Single-family home sales jumped to a seasonally adjusted annual rate of 5.35 million in February, down 7.0 percent from 5.75 million in January and down 2.2 percent from one year ago. The median existing singlefamily home price was $363,800 in February, up 15.5 percent from February 2021.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 670,000 units in February, down 9.5 percent from 740,000 in January and down 4.3 percent from one year ago. The median existing condo price was $305,400 in February, an annual increase of 10.9 percent.

“For the past couple of years, buyers have had to contend with a market of high demand, low inventory and a mix of uncertainties with COVID-19 protocols,” said NAR President Leslie Rouda Smith, a Realtor from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “Consumers are presently challenged with higher mortgage rates, so now, more than ever, interested buyers need the trusted expertise of Realtors in order to navigate this current market.”

REGIONAL BREAKDOWN

Existing-home sales in the Northeast slipped 11.5 percent in February, registering an annual rate of 690,000, a 12.7 percent drop from February 2021. The median price in the Northeast was $383,700, up 7.1 percent from one year ago.

Existing-home sales in the Midwest sagged 11.3 percent from the prior month to an annual rate of 1,330,000 in February, a 1.5 percent decrease from February 2021. The median price in the Midwest was $248,900, a 7.5 percent climb from February 2021.

Existing-home sales in the South fell 5.1 percent in February from the prior month, posting an annual rate of 2.79 million, an increase of 3.0 percent from one year ago. The median price in the South was $318,800, an 18.1 percent jump from one year prior. For the sixth straight month, the South experienced the highest pace of price appreciation compared to the other regions.

“Employment is vital for housing demand,” Yun said. “The Southern states are seeing faster job growth, and consequently, it’s the only region to experience a sales gain from a year ago.”

Existing-home sales in the West slid 4.7 percent from the previous month, reporting an annual rate of 1.21 million in February, down 8.3 percent from one year ago. The median price in the West was $512,600, up 7.1 percent from February 2021.