Existing-home sales fell in February as rising interest rates and inflation continue to put pressure on consumers, according to the National Association of Realtors.
Sales fell to a seasonally adjusted rate of 6.02 million, down 7.2% from January and 2.4% year-over-year. The inventory of unsold existing homes rose slightly to 87,000, or 1.7 months of supply at the current sales pace.
Each of the four major U.S. regions saw sales fall on a month-over-month basis in February. Sales activity year-over-year was also down overall, though the South experienced an increase while the remaining three regions reported drops in transactions.
The median existing-home sales price increased to $357,300, up 15% YOY and the 120th straight month of annual price increases. It’s the longest-running streak on record.
“Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases. Some who had previously qualified at a 3% mortgage rate are no longer able to buy at the 4% rate,” said Lawrence Yun, NAR’s chief economist.
Mortgage rates broke 4% for the first time since May 2019, averaging 4.16% last week.
The report suggests that rising food, gas, and other essential costs may have prevented consumers from buying a home.
“The sharp jump in mortgage rates and increasing inflation is taking a heavy toll on consumers’ savings,” Yun said.
“However, I expect the pace of price appreciation to slow as demand cools and as supply improves somewhat due to more home construction.”