Existing-home sales slide in February

Following two months of gains, existing-home sales declined in February, the National Association of Realtors (NAR) reported.

Completed transactions of single-family homes, condos, and co-ops decreased 6.6% from January to a seasonally adjusted annual rate of 6.22 million in February. On a year-over-year basis, sales climbed 9.1% compared to 5.7 million in February 2020.

Single-family home sales decreased to a seasonally-adjusted annual rate of 5.52 million in February, down 6.6% from 5.91 million in January, but rising  8% from one year ago. 

The median existing single-family home price was $317,100 in February, up 16.2% from February 2020. The median existing-home price for all housing types in February was $313,000, up 15.8% from February 2020 ($270,400), as prices rose in every region. February’s national price jump marks 108 straight months of year-over-year gains, the NAR said.

“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, chief economist of the NAR.

Yun 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% 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. 

Here’s how existing-home sales performed on a regional basis:

• Existing-home sales in the Northeast fall 11.5%, recording an annual rate of 770,000, a 13.2% increase from a year ago. The median price in the Northeast was $356,000, up 20.5% from February 2020.
• Existing-home sales in the Midwest dropped 14.4% to an annual rate of 1.31 million in February, a 2.3% rise from a year ago. The median price in the Midwest was $231,800, a 14.2% climb from February 2020.
• Existing-home sales in the South decreased 6.1%, posting an annual rate of 2.77 million in February, up 9.9% from the same time one year ago. The median price in the South was $271,200, a 13.6% increase from a year ago.
• Existing-home sales in the West rose 4.6% from the month prior, recording an annual rate of 1.37 million in February, a 12.3% jump from a year ago. The median price in the West was $493,300, up 20.6% from February 2020.