Existing-home sales up despite February freeze

Existing-home sales bumped up in February despite trends verging in the opposite direction for housing starts.

According to the National Association of Realtors, existing-home sales increased 1.2% last month to a seasonally adjusted annual rate of 4.88 million. That compares with 4.82 million in January and is 4.7% above year-ago levels.

In terms of single-family homes, sales were up 1.4% to a seasonally adjusted annual rate of 4.34 million in February.

However, tight inventory brought price growth to its fastest pace in a year, the NAR said.

The median existing-home price was $202,600 in February. The year-over-year gain of 7.5% is the highest since last February's (of 8.8%).

“Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels,” said NAR chief economist Lawrence Yun. “Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise.”

Total housing inventory rose 1.6% to 1.89 million existing homes available for sale, though this is 0.5% below last year's levels.

Regionally, winter weather took its toll in the Northeast, where sales dropped 6.5%. Sales were relatively flat in the Midwest, and the South and West carried the national average into positive territory at monthly increases of 1.9% and 5.7%, respectively.

“Severe below-freezing winter weather likely had an impact on sales as more moderate activity was observed in the Northeast and Midwest compared with other regions of the country," added Yun.

“With all indications pointing to a rate increase from the Federal Reserve this year -- perhaps as early as this summer -- affordability concerns could heighten as home prices and rents both continue to exceed wages," he said.