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Existing-home sales were on the upswing in February, according to a National Association of Realtors report published on Thursday.
The sale of existing single-family homes, townhomes, condominiums and co-ops declined 3.3 percent year-over-year from 4.53 million in February 2023 to a seasonally adjusted annual rate of 4.38 million. Although sales failed to break out of an annual slump, they rose 9.5 percent from January — marking the most significant monthly gain in a year.
Lawrence Yun
NAR Chief Economist Lawrence Yun said the month-over-month gain was due to a boost in inventory, which has given homebuyers more choice just in time for the beginning of the spring homebuying season.
Total housing inventory increased 5.9 percent month-over-month and 10.3 percent year-over-year to 1.07 million. Unsold inventory is at a 2.9-month supply at the current sales pace, an 11.5 percent increase from February 2023 (2.6 months).
“Additional housing supply is helping to satisfy market demand,” he said in a written statement. “Housing demand has been on a steady rise due to population and job growth, though the actual timing of purchases will be determined by prevailing mortgage rates and wider inventory choices.”
Median home prices continued to boom in February, rising 5.7 percent year-over-year to $384,500.
Lisa Sturtevant | Image: Bright MLS
Bright MLS Chief Economist Dr. Lisa Sturtevant said February’s existing-home sales provide a bit of hope for the housing market over the coming months, but it doesn’t erase uncertainty about mortgage rates and affordability.
“The uptick in sales activity between January and February is a good sign, but there is some uncertainty in the housing market as we head into spring,” she said in an email to Inman. “The Federal Reserve likely will put off rate cuts until the summer, which suggests that mortgage rates will not come down much in the first half of the year.”
Sturtevant said consumers “seem to be adjusting to the new normal” of higher mortgage rates; however, she said eight consecutive months of annual price growth will make it harder for buyers to stomach further rate increases.
“Prices are now more than 40 percent higher than they were before the pandemic, and with interest rates nearly double what they were then, the typical monthly payment for a homebuyer has increased by nearly 90 percent,” she said.
Danielle Hale | Realtor.com chief economist
Realtor.com Chief Economist Danielle Hale said the latest release of housing market reports for existing and pending home sales show that “home sales improvements ahead may not be a straight line up” as consumers attempt to time their purchases based on mortgage rates and other economic factors.
However, she said the market still offers plenty of opportunities, especially for homesellers.
“With prices still going up, the number of homes on the market still limited, and equity still quite high, homeowners who choose to pursue a sale in 2024 face relatively healthy market conditions,” she said. “Those hoping to capitalize on the best conditions of the spring market, however, would do well to start planning now.”
