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Existing home sales rose 9.5% in February from January to 4.38 million units on a seasonally adjusted annual basis, in response to the National Association of Realtors. Housing analysts expected a slight decline.
Sales fell 3.3% year-on-year, but this was the biggest monthly increase since February 2023. Sales increased most in the West (19.4%) and in the South by 16.4%. Sales in the Northeast were unchanged.
“Additional housing supply helps meet market demand,” said Lawrence Yun, NAR’s chief economist. “Demand for housing continues to grow due to population and job growth, although the actual timing of purchases will depend on prevailing mortgage interest rates and a broader range of choices.”
Inventory increased 10.3% year-over-year to 1.07 million homes on the market at the top of February. This still means a low supply of two.9 months at the present sales rate.
Higher demand continued to push the typical price up, up 5.7% from a yr earlier to $384,500 – the eighth straight month of annual increases. Competition was fierce – 20% of homes sold above list price.
Sales are counted based on closings, so the deals were likely signed in December and January, when rates on 30-year fixed mortgages dropped to the mid-6% range. According to him, it’s currently over 7%. Daily mortgage news.
However, the variety of first-time buyers didn’t increase with overall sales. They made up just 26% of buyers in February, down from 28% in January. About 40% is the historical norm. Cash-only sales were 33%, up from 28% a yr earlier.
“The stock market, maybe that helps, or record high house prices. Residents of expensive states like California are going to cheaper markets like Florida and Georgia and paying all cash,” Yun said, adding that customers could also be accepting the “new normal” for mortgage rates.
