February is a good month for existing-home sales
National Association of Realtors reports the strongest month since February 2007.
Following a decline in January, existing-home sales jumped in February.
Total existing-home sales increased 6.5% to a seasonally-adjusted annual rate of 5.77 million, the National Association of Realtors (NAR) reported today. This includes completed transactions of single-family homes, townhomes, condominiums and co-ops.
On a year-over-year basis, overall sales are up 7.2% from a rate of 5.38 million in February 2019.
“February’s sales of over 5 million homes were the strongest since February 2007,” said Lawrence Yun, NAR’s chief economist. “I would attribute that to the incredibly low mortgage rates and the steady release of a sizable pent-up housing demand that was built over recent years.”
But Yun notes that February’s home sales do not reflect the current turmoil in the stock market or the significant hit the economy is expected to take because of the coronavirus outbreak and social quarantines.
“These figures show that housing was on a positive trajectory, but the coronavirus has undoubtedly slowed buyer traffic and it is difficult to predict what short-term effects the pandemic will have on future sales,” Yun said.
Single-family home sales sat at a seasonally-adjusted annual rate of 5.17 million in February, up from 4.82 million in January, and up 7.3% from a year ago. The median existing single-family home price was $272,400 in February, up 8.1% from February 2019.
February existing-home sales in the Northeast fell 4.1% to an annual rate of 700,000, a 2.9% increase from a year ago. The median price in the Northeast was $295,400, up 8.2% from February 2019.
Existing-home sales increased 0.8% in the Midwest to an annual rate of 1.29 million, up 4% from a year ago. The median price in the Midwest was $203,700, a 7.9% increase from February 2019.
In the South, existing-home sales climbed 7.2% to an annual rate of 2.52 million in February, up 8.2% from the same time one year ago. The median price in the South was $238,000, an 8.2% increase from a year ago.
The West saw existing-home sales surge 18.9% to an annual rate of 1.26 million in February, an 11.5% increase from a year ago. The median price in the West was $410,100, up 8.1% from February 2019.
The median existing-home price for all housing types in February was $270,100, up 8% from February 2019 ($250,100), as prices rose in every region. February’s price increase marks 96 straight months of year-over-year gains.
Total housing inventory at the end of February totaled 1.47 million units, up 5% from January, but down 9.8% from one year ago (1.63 million). Unsold inventory sits at a 3.1-month supply at the current sales pace.
First-time buyers were responsible for 32% of sales in February, equal to the percentages seen in both January 2020 and in February 2019.
“For the past couple of months, we have seen the number of buyers grow as more people enter the market,” Yun said. “Once the social-distancing and quarantine measures are relaxed, we should see this temporary pause evaporate, and will have potential buyers return with the same enthusiasm.”
Despite the crisis, don’t expect home prices to drop like the stock market. Yun said that homes will hold their value due to the ongoing housing shortage and the number of homes being delisted during the crisis.
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