Existing Home Sales Off in February
Washington, DC, March 23--Existing home sales slipped in February but remained above year ago levels, while home prices rose at double digit rates, according to the National Association of Realtors.
Total existing home sales, including single family, townhomes, condominiums and co-ops, were down 0.4 percent in February to a seasonally adjusted annual rate of 6.79 million from an upwardly revised pace of 6.82 million in January. Last month's sales activity was 6.1 percent above the 6.40 million unit pace in February 2004.
David Lereah, NAR's chief economist, said the housing market appears to be in the early stages of settling down. "In essence, home sales were surging at unprecedented levels for most of last year," he said. "The cooling we expect in sales this year means we'll be transitioning from a white-hot housing market into a very strong market that still favors home sellers, but should become more balanced as the year progresses."
The national median existing-home price for all housing types was $191,000 in February, up 11.0 percent from February 2004 when the median price was $172,000. The median is a typical market price where half of the homes sold for more and half sold for less.
Total housing inventory levels rose 10.7 percent at the end of February with 2.38 million existing homes available for sale, which represents a 4.2 month supply at the current sales pace – January was a record low 3.8 month supply. For a market to be fairly balanced between buyers and sellers, a supply in the range of 6 months is required.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.63 percent in February, down from 5.71 percent in January; it was 5.64 percent in February 2004.
Condominium and cooperative housing sales last month accounted for 12.5 percent of market activity. Existing condo sales slipped 1.2 percent to a seasonally adjusted annual rate of 848,000 units in February from a record level of 858,000 units in January. Last month's sales activity was 10.4 percent above the 768,000-unit pace in February 2004. The median condo price was $210,700, up 20.5 percent from the same month a year ago.
Single family home resales eased 0.3 percent in February to a seasonally adjusted annual rate of 5.94 million units from a level of 5.96 million in January. Last month's sales activity was 5.5 percent above the 5.63 million-unit pace in February 2004. The median single family home price was $188,200 in February, up 9.4 percent from a year earlier.
Regionally, total existing home sales in the Northeast rose 4.6 percent from January to a pace of 1.14 million units in February, and were 4.6 percent above the level in February 2004. The median existing home price in the Northeast was $251,000, up 18.4 percent from a year ago.
Existing home sales in the Midwest increased 2.0 percent to an annual rate of 1.50 million units in February, and were 4.2 percent above a year earlier. The median price in the Midwest was $156,000, up 9.1 percent from February 2004.
The home resale pace in the West held even at an annual rate of 1.59 million units in February and was 6.7 percent stronger than February 2004. The median existing home price in the West was $279,000, up 16.7 percent from the same month a year ago.
Existing home sales in the South fell 3.4 percent from January to an annual rate of 2.56 million units in February, but were 8.0 percent higher than a year ago. The median price of an existing home in the South was $164,000, which was 7.2 percent higher than February 2004.