Existing-home sales dipped in February, continuing a seesawing pattern of gains and declines over the last few months, according to the National Association of Realtors (NAR). 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.
Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, sank 7.2 percent from January to a seasonally adjusted annual rate of 6.02 million in February. Year-over-year, sales decreased 2.4 percent (6.17 million in February 2021).
“Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases,” said Lawrence Yun, NAR’s chief economist. “Some who had previously qualified at a 3 percent mortgage rate are no longer able to buy at the 4 percent rate.
“Monthly payments have risen by 28 percent from one year ago – which interestingly is not a part of the consumer price index – and the market remains swift with multiple offers still being recorded on most properties.”
Total housing inventory at the end of February totaled 870,000 units, up 2.4 percent from January and down 15.5 percent from one year ago (1.03 million). Unsold inventory sits at a 1.7-month supply at the current sales pace, up from the record-low supply in January of 1.6 months and down from 2.0 months in February 2021.
Yun notes that rising rates and escalating prices have prevented many consumers from making a purchase.
“The sharp jump in mortgage rates and increasing inflation is taking a heavy toll on consumers’ savings,” he said. “However, I expect the pace of price appreciation to slow as demand cools and as supply improves somewhat due to more home construction.”
The median existing-home price for all housing types in February was $357,300, up 15.0 percent from February 2021 ($310,600), as prices grew in each region. This marks 120 consecutive months of year-over-year increases, the longest-running streak on record.
Realtor.com’s Market Trends Report in February shows that the greatest year-over-year median list price growth occurred in Las Vegas (+39.6 percent), Miami (+31.6 percent) and Tampa (+31.5 percent). Austin posted the highest growth in the share of homes which had their prices reduced compared to last year (+3.3 percentage points), followed by Milwaukee (+2.1 percentage points), Pittsburgh and Baltimore (+1.4 percentage points each).