Existing-home sales increased in February,
reversing losses in January, according to the latest report by the
NATIONAL ASSOCIATION OF REALTORS®.
However, sales activity remains relatively soft, reflecting additional
layoffs and buyers waiting for housing provisions in the economic
stimulus package to take effect, according to NAR.
Existing-home sales—
including single-family, townhomes, condominiums and co-ops—rose 5.1
percent to a seasonally adjusted annual rate of 4.72 million units in
February from a pace of 4.49 million units in January. Existing-home
sales are 4.6 percent below the 4.95 million-unit level in February
2008. Seasonal adjustment factors are more volatile in winter months,
but sales rates over the past few months show dampened sales activity,
according to NAR.
Lawrence Yun,
NAR chief economist, says first-time buyers accounted for half of all
home sales last month, with activity concentrated in lower price
ranges.
“Because entry level buyers are shopping
for bargains, distressed sales accounted for 40 to 45 percent of
transactions in February,” he says. “Our analysis shows that distressed
homes typically are selling for 20 percent less than the normal market
price, and this naturally is drawing down the overall median price.”
Home Buyer Tax Credit Increases Activity
NAR President Charles McMillan says home shopping activity has picked up with housing affordability at a record high.
“The number of buyers looking for homes
rose 5 percent in February, and also was 5 percent above a year ago,”
he says. “It appears most of the increase in buyer traffic occurred in
the latter part of the month after the $8,000 first-time buyer tax credit was
put in place. At the same time, mortgage purchase applications have
risen, so we expect to see sales picking up around late spring.”
McMillan notes that more potential buyers are learning about the tax credit, just as the traditional spring home-buying season begins.
Existing-Home Sales Rise in February
The national median existing-home price for
all housing types was $165,400 in February, down 15.5 percent from a
year ago when the median was $195,800 and conditions were close to
normal. The median is where half of the homes sold for more and half
sold for less.
“Given the downward distortion in price
comparisons due to distressed sales, it’s important for owners to keep
in mind that this doesn’t equate to a similar loss of value for
traditional homes in good condition,” Yun says.
Housing inventory:
Total housing inventory at the end of February rose 5.2 percent to 3.80
million existing homes available for sale, which represents a 9.7-month
supply at the current sales pace, unchanged from January. In the six
months prior to February, the total number of homes for sale had
steadily declined from a record level last July.
Single-family home sales:
rose 4.4 percent to a seasonally adjusted annual rate of 4.23 million
in February from a level of 4.05 million in January, but are 3.6
percent below the 4.39 million-unit pace in February 2008. The median
existing single-family home price was $164,600 in February, down 15
percent from a year ago.
Existing condominium and co-op sales:
increased 11.4 percent to a seasonally adjusted annual rate of 490,000
units in February from 440,000 units in January, but are 13.1 percent
lower than the 564,000-unit pace a year ago. The median existing condo
price was $172,200 in February, which is 18.7 percent lower than
February 2008.
According to Freddie Mac, the national average commitment rate
for a 30-year, conventional, fixed-rate mortgage edged up to 5.13
percent in February from a record low 5.05 percent in January. The rate
was 5.92 percent in February 2008. Last month’s average mortgage rate
was the second lowest since data collection began in 1971. Last week
the rate further declined to 4.98 percent.
Regional Breakdown
Yun says a recovery in the West is much
stronger than expected. “Strong sales gains in the West are led by
California, where the median listing price is beginning to rise for the
first time in three years,” he says.
Here's how existing-home sales fared across the country:
- Northeast: jumped 15.6 percent to an annual pace of 740,000 in February, but 14.9 percent below February 2008. Median price: $251,200, down 4.8 percent from a year ago.
- Midwest: increased 1 percent in February to a pace of 1.04 million but 14 percent lower than a year ago. Median price: $131,000, which is 7.8 percent below February 2008.
- South: rose 6.1 percent to an annual pace of 1.74 million in February but 11.2 percent below February 2008. Median price: $146,700, down 10 percent from a year ago.
- West: increased 2.6 percent to an annual rate of 1.2 million in February and remain 30.4 percent higher than a year ago. Median price: $204,600, which is 30.3 percent below February 2008.
Source: NAR
