US existing home sales from the National Association of Realtors rose 14.5% month-over-month in February to a seasonally adjusted annual rate of 4.58 million (consensus 4.2 million) versus an unrevised 4.0 million in January. Existing home sales had fallen twelve straight months prior to February, the longest stretch since 1999, and the lowest level since November of 2010. Total sales in February were down .0% from one year ago. All regions experienced year-over-year declines.
The median existing-home price for all housing types in January was $363,000, a decline of 0.2% from February 2022 ($363,700), as prices climbed in the Midwest and South yet waned in the Northeast and West. This ends a streak of 131 consecutive months of year-over-year increases, the longest on record.
The report reconfirms positive moves in the real estate market last month with rates lower. However, U.S. property market remained pressured by high mortgage rates and rising prices. The median selling price declined for the first time in 11 years, underscoring the affordability challenges.
Properties typically remained on the market for 34 days in February, up from 33 days in January and 18 days in February 2022. Fifty-seven percent of homes sold in February were on the market for less than a month.
“Inventory levels are still at historic lows,” NAR Chief Economist Lawrence Yun. “Consequently, multiple offers are returning on a good number of properties.”
Data for February 2023
Highlights
- Existing Home Sales Feb: 4.58M (est 4.2M; prev 4.0M)
- Existing Home Sales (M/M) Feb: 14.5% (est 5.0%; prev -0.7%)
- Largest monthly percentage increase since July 2020.
- Existing Home Sales (Y/Y): -22.6%
- Median Home Price (Y/Y) (USD): 363.3K or -.03%
- Freddie Mac 30-year fixed-rate mortgage averaged 6.60% as of March 16. Down from 6.73% from the previous week but up from 4.16% one year ago.
“Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines,” said NAR Chief Economist Lawrence Yun. “Moreover, we’re seeing stronger sales gains in areas where home prices are decreasing, and the local economies are adding jobs.”
- The median existing-home sales price decreased 0.2% from the previous year to $363,000.
- The inventory of unsold existing homes was unchanged from the prior month at 980,000 at the end of February, or the equivalent of 2.6 months’ supply at the current monthly sales pace.
- Unsold inventory sits at a 2.6-month supply at the current sales pace, down 10.3% from January but up from 1.7 months in February 2022.
- First-time buyers were responsible for 27% of sales in February, down from 31% in January and 29% in February 2022.
- NAR’s 2022 Profile of Home Buyers and Sellers – released in November 2022 – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
- All-cash sales accounted for 28% of transactions in February, down from 29% in January but up from 25% in February 2022.
- Properties typically remained on the market for 34 days in February, up from 33 days in January and 18 days in February 2022. Fifty-seven percent of homes sold in February were on the market for less than a month.
- Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in February, up from 16% in January but down from 19% in February 2022.
- Distressed sales – foreclosures and short sales – represented 2% of sales in February, nearly identical to last month and one year ago.
- According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.60% as of March 16. That’s down from 6.73% from the previous week but up from 4.16% one year ago.
Regional Breakdown
- Existing home sales across regions: Northeast (+4.0%); Midwest (+13.5%); South (+15.9%); and West (+19.4%).
- Median home prices by region year-over-year: Northeast ($366,100, down 4.5%); Midwest ($261,200, up 5.0%); South ($342,000, an increase of 2.7%); and West ($541,100, down 5.6%).
Realtor.com®’s Market Trends Report in in November shows that the largest year-over-year median list price growth occurred in Milwaukee (+38.1%), Memphis (+26.9%) and Miami (+24.8%). Phoenix reported the highest increase in the share of homes that had prices reduced compared to last year (+28.4 percentage points), followed by Austin (+23.8 percentage points) and Denver (+21.0 percentage points).
The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.
Existing home sales account for 90% of US transactions and are calculated on a contract close basis. New home sales account for the remaining 10% and are based on contract signings.
Existing-home sales include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR benchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.
Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.
Source: NAHB
From The TradersCommunity News Desk