Americans went on a home-buying spree in the month before the coronavirus slammed the brakes on the economy.
Existing-home sales jumped 6.5 percent to 5.77 million in February over the month before – which is also a 7.2 percent increase over a year ago, according to the monthly sales report from the National Association of Realtors (NAR).
“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.”
The median existing-home price for all housing types in February was $270,100, up 8 percent from February 2019 ($250,100) – marking 96 straight months of year-over-year gains.
Every region but the Northeast saw increases in home sales during the month:
- Existing-home sales dropped 4.1 percent in the Northeast last month, though still a 2.9 percent increase over February 2019. The median price in the region was $295,400, up 8.2 percent from a year earlier.
- In the Midwest, sales increased 0.8 percent – and 4 percent over a year ago. The median price was $203,700, a 7.9 percent increase over February 2019.
- Sales climbed by 7.2 percent in the South, with an 8.2 percent increase over a year ago. The median price was $238,000, an 8.2 percent increase over last year.
- And the West led the way, with sales jumping 18.9 percent – and 11.5 percent over a year ago. The median price was $410,000, up 8.1 percent over last February.
While last month’s numbers are positive, Yun cautioned that they do not reflect the current state of the economy.
“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.
A NAR survey released Thursday showed that 48 percent of realtors said home buyer interest has decreased due to the coronavirus. That’s triple the number from a week ago, when it was 16 percent.
The NAR report released Friday also shows that 1.47 million houses were on the market at the end of February, up 5 percent from January but down 9.8 percent from a year ago. Properties typically remained on the market for 36 days in February, seasonally down from 43 days in January, and down from 44 days in February 2019. Forty-seven percent of homes sold in February 2020 were on the market for less than a month.
Yun said it is difficult to predict what will happen next, though he expects prices to remain relatively steady.
“Unlike the stock market, home prices are not expected to drop because of the on-going housing shortage and due to homes getting delisted during this time of crisis,” he said.