Existing Home Sales Rebound In February
Friday, March 29, 2019
From Builder magazine
Existing-home sales rebounded in February, posting the largest month-over-month gain since December 2015, according to the National Association of Realtors (NAR). Three of the four major U.S. regions saw sales gains, while the Northeast remained unchanged from last month.
Total existing-home sales surged 11.8% from January to a seasonally adjusted annual rate of 5.51 million in February. However, sales were down 1.8% from a year ago (5.61 million in February 2018).
Lawrence Yun, NAR’s chief economist, credited a number of aspects to the jump in February sales. “A powerful combination of lower mortgage rates, more inventory, rising income, and higher consumer confidence is driving the sales rebound,” he said.
The median existing-home price for all housing types in February was $249,500, up 3.6% from February 2018 ($240,800). February's price increase marks the 84th straight month of year-over-year gains.
February existing-home sales numbers in the Northeast were identical to last month. The annual rate of 690,000 is 1.5% above a year ago. The median price in the Northeast was $272,900, which is up 3.8% from February 2018.
In the Midwest, existing-home sales rose 9.5% from last month to an annual rate of 1.27 million, roughly even to February 2018 levels. The median price in the Midwest was $188,800, which is up 5.4% from last year.
Existing-home sales in the South grew 14.9% to an annual rate of 2.39 million in February, down 0.4% from last year. The median price in the South was $219,300, up 2.5% from a year ago. Existing-home sales in the West rose 16.0% to an annual rate of 1.16 million in February, 7.9% below a year ago. The median price in the West was $379,300, up 3.0% from February 2018.
Total housing inventory at the end of February increased to 1.63 million, up from 1.59 million existing homes available for sale in January, a 3.2% increase from 1.58 million a year ago. Unsold inventory is at a 3.5-month supply at the current sales pace, down from 3.9 months in January but up from 3.4 months in February 2018.
“It is very welcoming to see more inventory showing up in the market,” said Yun. “Consumer foot traffic consequently is rising as measured by the opening rate of SentriLock key boxes.”
NAR’s SentriLock data, for key access to unlock a home, was measurably higher in January and February compared to the second half of 2018.
Properties remained on the market for an average of 44 days in February, down from 49 days in January but up from 37 days a year ago. Forty-one percent of homes sold in February were on the market for less than a month.
Yun, who has called for more inventory over the course of 2018, said the market would benefit greatly in 2019 with additional new housing. “For sustained growth, significant construction of moderately-priced homes is still needed. More construction will help boost local economies and more home sales will help lessen wealth inequality as more households can enjoy in housing wealth gains.”
A typical homeowner accumulated an estimated $8,700 in housing equity over the past 12 months and $21,300 over the past 24 months.
Realtor.com's Market Hotness Index, measuring time-on-the-market data and listing views per property, revealed that the hottest metro areas in January were Midland, Texas; Chico, California; Colorado Springs, Colorado; Spokane-Spokane Valley, Washington; and San Francisco-Oakland-Hayward, California.
“We're very happy to see homebuyers returning to the market, as the beginning of Spring represents a prime time to purchase a new home,” said NAR president John Smaby, a second-generation Realtor from Edina, Minnesota, and broker at Edina Realty. “Potential buyers and sellers should seek out a local Realtor to stay abreast of the market and take advantage of the various housing benefits that are currently being extended during housing transactions.”
First-time buyers were responsible for 32% of sales in February, up from last month and a year ago (both 29%). NAR’s 2018 Profile of Home Buyers and Sellers– released in late 2018 – revealed that the annual share of first-time buyers was 33%.
All-cash sales accounted for 23% of transactions in February, equal to January's percentage, but marginally down from a year ago (24%). Individual investors, who account for many cash sales, purchased 16% of homes in February, identical to January's 16%, but a tick up from a year ago (15%).
Distressed sales – foreclosures and short sales – represented 4% of sales in February, equal to both the 4% represented in January and at this time a year ago. 1% of February sales were short sales.
Single-family home sales sit at a seasonally adjusted annual rate of 4.94 million in February, up from 4.36 million in January and down 1.4% from 5.01 million a year ago. The median existing single-family home price was $251,400 in February, up 3.6% from February 2018.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 570,000 units in February, unchanged from last month and down 5.0% from a year ago. The median existing condo price was $233,300 in February, which is up 3.1% from a year ago.