Existing-home sales sag as prices sizzle

Existing-home sales decreased in February, continuing a back-and-forth pattern of gains and declines over the last few months, the National Association of Realtors (NAR) reported this morning.

Total existing-home sales, including completed transactions of single-family homes, townhomes, condos, and co-ops, fell 7.2% from January to a seasonally adjusted annual rate of 6.02 million in February. 

Year-over-year, sales decreased 2.4% compared to a rate of 6.17 million in February 2021.

Single-family homes fell 7% to a seasonally adjusted annual rate of 5.35 million compared to 5.75 million in January. Sales of single-family homes are also down 2.2% compared to the same period a year ago.

The median existing single-family home price was $363,800 in February, shooting up 15.5% from February 2021.

The median existing-home price for all housing types in February was $357,300, up 15% 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, the NAR said.

“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 chief economist. “Some who had previously qualified at a 3% mortgage rate are no longer able to buy at the 4% rate.”

Total housing inventory at the end of February stood at 870,000 units, up 2.4% from January and down 15.5% 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 months in February 2021.

“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.”

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 670,000 units in February, down 9.5% from 740,000 in January and down 4.3% from one year ago. The median existing condo price was $305,400 in February, an annual increase of 10.9%.

Here’s how February existing-home sales break down on a regional basis:

• Existing-home sales in the Northeast slipped 11.5% in February, registering an annual rate of 690,000, a 12.7% drop from February 2021. The median price in the Northeast was $383,700, up 7.1% from one year ago.
• Existing-home sales in the Midwest sagged 11.3% from the prior month to an annual rate of 1,330,000 in February, a 1.5% decrease from February 2021. The median price in the Midwest was $248,900, a 7.5% climb from February 2021.
• Existing-home sales in the South fell 5.1% in February from the prior month, posting an annual rate of 2,790,000, an increase of 3% from one year ago. The median price in the South was $318,800, an 18.1% jump from one year prior. For the sixth-straight month, the South experienced the highest pace of price appreciation compared to the other regions.
• Existing-home sales in the West slid 4.7% from the previous month, reporting an annual rate of 1,210,000 in February, down 8.3% from one year ago. The median price in the West was $512,600, up 7.1% from February 2021.

Earlier this week, the National Association of Home Builders reported that the minimum income required to purchase a $150,000 home is $36,074. In 2022, about 36 million U.S. households are estimated to have incomes at or below that threshold. Another 24.4 million can only afford a home priced between $150,000 and $250,000.