Existing Home Sales Increase 3%
Jist realeased from Nation Association of Realtors regardless of the low inventory and rising prices, existing home sales have bounced back with sizable increases across the country.
Existing home sales for single family properties, townhomes, condos and coops grew by 3.0% to 5.54 million in February from January. After this increase sales are 1.1% higher than a year ago.
Lawrence Yun, NAR chief economist, says sales were uneven across the country in February but 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,” he said. “The very healthy U.S. economy and labor market are creating a sizeable interest in buying a home in early 2018. 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.”
Added Yun, “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. Looking ahead, several markets in the Northeast will likely see even more temporary disruptions from the large winter storms that have occurred in March.”
Median pricing for all housing for the month of February was up by 5.9% from the same time last year. This is the 72nd month in a row for year over year increases.
Inventory by February’s end had risen by 4.6% with 1.59 million homes for sale, but this is still 8.1% lower than one year ago. This is the 33rd month in a row where inventory has been diminishing. Unsold inventory is now at a 3.4 month supply at the existing sales pace which is lower than the 3.8 months from a year ago.
Rates have been slowly climbing with the average commitment rate for a 30 year fixed-rate at 4.33 % in February which is up from 4.03% in January. The average for all of 2017 was at 3.99%.
Homes were on the market for an average of 37 days in February which was down from January at 41 days. This is lower than the average of 45 days from a year ago.
“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,” said Yun. “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. To fully satisfy demand, most markets right now need a substantial increase in new listings.”
Updated: 2nd Quarter 2018
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Updated: 2nd Q 2018