February Existing Home Sales Tumble 7%

The National Association of Realtors (NAR) reports that the seasonally adjusted annual rate of existing home sales in February plummeted 7.1%, to a seasonally adjusted annual rate of 5.08 million from a total of 5.47 million in January.

The consensus estimate called for sales to reach 5.305 million, according to a survey of economists polled by Bloomberg.

The NAR’s chief economist said:

Sales took a considerable step back in most of the country last month, and especially in the Northeast and Midwest. 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.

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Housing inventory increased by 3.3% in February to 1.88 million homes, which is equal to a supply of 4.4 months, an increase from 4.0 months in January.

According to the NAR, the national median existing home price for all housing types in February was $201,900, up 4.4% compared with February 2015, the 48th consecutive month of rising home prices. In January the national median price was $213,800.

The percentage of first-time buyers fell from 32% in January to 30% in February, but still up from 29% in February 2015.

Sales of single-family homes fell 7.2% from the January total to a seasonally adjusted annual rate of 4.51 million, up 2% compared with February 2015. Sales of multifamily homes fell 6.6% in February at a seasonally adjusted annual rate of 570,000 units.

All homes were on the market for an average of 59 days in February, down from 64 days in January. Foreclosed and non-distressed homes were on the market for an average of 57 days, and short sales took a median of 126 days to sell.

The NAR also reported the following regional data:

• February existing home sales in the Northeast fell 17.1% year over year, to an annual rate of 630,000, and are now 5% above a year ago. The median price in the Northeast was $247,500, which is 0.8% lower than February 2015.
• In the Midwest, existing home sales decreased 13.8%, to an annual rate of 1.12 million, in February and are now equal to February 2015 sales. The median price in the Midwest was $162,700, up 6.3% from a year ago.
• Existing home sales in the South fell 1.8% in February, to an annual rate of 2.2 million, and are now 3.3% above February 2015 sales. The median price in the South was $186,400, up 5% from a year ago.
• Existing home sales in the West declined by 3.4%, to an annual rate of 1.13 million, in February and are now 0.9% higher than a year ago. The median price in the West was $308,800, which is 7% above the February 2015 median.