Feb. Existing-Home Sales Fell from Jan. Rates, but Remained Up YOY

Washington, DC, March 21, 2016—After increasing to the highest annual rate in six months, existing-home sales tumbled in February amidst unshakably low supply levels and steadfast price growth in several sections of the country, according to the National Association of Realtors. Led by the Northeast and Midwest, all four major regions experienced sales declines in February.

Total existing-home sales dropped 7.1% to a seasonally adjusted annual rate of 5.08 million in February from 5.47 million in January. Despite last month's large decline, sales are still 2.2% higher than a year ago. 

Lawrence Yun, NAR chief economist, says existing sales disappointed in February and failed to keep pace with what had been a strong start to the year. "Sales took a considerable step back in most of the country last month, and especially in the Northeast and Midwest," he said. "The lull in contract signings in January from the large East Coast blizzard, along with the slump in the stock market, may have played a role in February's lack of closings. However, the main issue continues to be a supply and affordability problem. Finding the right property at an affordable price is burdening many potential buyers." 

According to Yun, job growth continues to hum along at a robust pace, but there appears to be some uneasiness among households that the economy is losing some steam. This was evident in NAR's latest quarterly HOME survey—released earlier this month—which revealed that fewer respondents believe the economy is improving, and a smaller share of renters said that now is a good time to buy a home.

"The overall demand for buying is still solid entering the busy spring season, but home prices and rents outpacing wages and anxiety about the health of the economy are holding back a segment of would-be buyers," says Yun.

The median existing-home price for all housing types in February was $210,800, up 4.4% from February 2015 ($201,900). February's price increase marks the 48th consecutive month of year-over-year gains.

Total housing inventory at the end of February increased 3.3% to 1.88 million existing homes available for sale, but is still 1.1% lower than a year ago (1.90 million). Unsold inventory is at a 4.4-month supply at the current sales pace, up from 4.0 months in January.