Existing home sales jump higher in February
The United States National Association of Realtors (or NAR) releases a monthly report on the existing home sales (ITB) market. The report publishes data concerning existing housing inventory, total housing inventory, median home prices, and mortgage rates. The outlook for the housing market (REM) and future demand can be estimated using existing home sales data.
As per the March report from NAR, existing home sales have increased 3.0% to a seasonally adjusted annual rate of 5.5 million homes in February as compared to a downward revised 5.38 million homes in January. This is a welcome bounce after the steepest decline in home sales in three years was reported in the previous month. The average commitment rate for a 30-year mortgage (MBB) increased for a fifth straight month to 4.33% from 4.30% in January.
Reason for the bump in sales
Lawrence Yun, the chief economist of NAR, said that existing home sales were not spread across the country, but a big jump in sales in the Southern and the Western regions helped the rebound in the February sales numbers. He said that home prices were increasing as supply was exceeding demand, which is being pushed higher because of rising wages and an expanding economy.
Price and inventory trends in the housing market
House prices in the US have increased for 72 consecutive months year-over-year. The median home price (FTY) across the US in February was $241,700, up by 5.9% from the same period in the previous year.
Total housing inventory has increased 4.6% to 1.6 million listings but was still lower than the previous year’s availability at 8.1%. The percentage of first-time buyers remained unchanged at 29% in February, and the unsold inventory has remained below the five-month supply at 3.4, which indicates a tight housing (EQR) market. The demand for existing housing was the highest in the following markets:
- San Francisco-Oakland-Hayward
- Midland, Texas
- San Jose-Sunnyvale-Santa Clara
Overall, the housing market took a breather in February, but the economic conditions point suggest continued growth of the sector at least in the near term.