Existing Home Sales Exploded In February

Existing-home sales exploded in February, breaking a full-year downward streak thanks to retreating interest rates.

Sales increased by 14.5% to a seasonally adjusted annual rate of 4.48 million from 4.02 million the month prior, according to the latest data from the National Association of Realtors.

It’s the largest monthly percentage increase since July 2020.

All four major regions saw sales increase month-over-month and decrease year-over-year. At the same time, the median price for an existing home slid YOY alongside rates, down 0.2% to $363,000. This is the first YOY decline in 131 consecutive months, the longest streak on record.

“Conscious of changing mortgage rates, homebuyers are taking advantage of any rate declines. Moreover, we’re seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs,” NAR Chief Economist Lawrence Yun said.

“Inventory levels are still at historic lows. Consequently, multiple offers are returning on a good number of properties,” Yun added.

February’s inventory of unsold homes remained mostly unchanged from January at 980,000.

This is a 2.9-month supply at the current sales pace, up from 1.7 months in December 2021. Zillow says homebuyers are growing frustrated with limited options on the market thanks to high rates keeping homeowners in their houses longer.

“We know there are a lot of motivated buyers looking for homes… But buyers are disappointed in their options. Homeowners aren’t giving up their current house and low monthly payments to join a tight, expensive market,” said Skylar Olsen, Zillow’s chief economist. “Meanwhile, volatility in the economy makes planning extremely difficult.”

The typical home stayed on the market for 33 days in December, up from 26 in December, while 57% of homes sold were on the market for less than a month.

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