Existing-Home Sales Descend 6.6 Percent in February

Existing-home sales declined in February, following two prior months of gains, according to the National Association of Realtors®. Month-over-month, only one major region saw an increase in February, but all four U.S. regions recorded year-over-year gains.

Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 6.6 percent from January to a seasonally-adjusted annual rate of 6.22 million in February. Sales in total climbed year-over-year, up 9.1 percent from a year ago (5.70 million in February 2020).

“Despite the drop in home sales for February – which I would attribute to historically-low inventory – the market is still outperforming pre-pandemic levels,” said Lawrence Yun, NAR’s chief economist.

He cautioned of a possible slowdown in growth in the coming months as higher prices and rising mortgage rates will cut into home affordability.

“I still expect this year’s sales to be ahead of last year’s, and with more COVID-19 vaccinations being distributed and available to larger shares of the population, the nation is on the cusp of returning to a sense of normalcy,” Yun said. “Many Americans have been saving money and there’s a strong possibility that once the country fully reopens, those reserves will be unleashed on the economy.”

Total housing inventory at the end of February amounted to 1.03 million units, equal to January’s inventory and down 29.5 percent from one year ago (1.46 million). Unsold inventory sits at a 2.0-month supply at the current sales pace, slightly up from January’s 1.9-month supply and down from the 3.1-month amount recorded in February 2020.

First-time buyers were responsible for 31 percent of sales in February, down from 33 percent in January and from 32 percent in February 2020. Individual investors or second-home buyers, who account for many cash sales, purchased 17 percent of homes in February, up from 15 percent in January and equal to the percentage from February 2020.

Single-family home sales decreased to a seasonally-adjusted annual rate of 5.52 million in February, down 6.6 percent from 5.91 million in January, and up 8.0 percent from one year ago. Existing condominium and co-op sales were recorded at a seasonally-adjusted annual rate of 700,000 units in February, down 6.7 percent from January and up 18.6 percent from one year ago.

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