US existing home sales rise more than expected in February
By Michele Maatouk
Date: Wednesday 21 Mar 2018
(ShareCast News) - Sales of US existing homes rose more than expected in February, according to data from the National Association of Realtors.
Sales were up 3% to a seasonally-adjusted annual rate of 5.54m from 5.38m in January, rebounding from a 3.2% drop the month before and beating expectations of a 0.5% increase.
The median price of an existing home was $241,700, up 5.9% from February 2017 and marking the 72nd straight month of year-over-year gains. Meanwhile, total housing inventory was 4.6% higher at 1.59m, but was still down 8.1% compared to a year ago and has fallen year-over-year for 33 consecutive months.
Existing home sales in the Northeast declined 12.3% to an annual rate of 640,000, while the median price was up 3.6% to $258,900. In the Midwest, existing home sales dipped 2.4% to 1.22m last month, while the median price edged up 4.5% to $179,400.
In the South, sales rose 6.6% to 2.41m, with the median price up 5.4% to $215,700. In the West, sales surged 11.4% to 1.27m and the median price jumped 9.6% to $370,600.
Lawrence Yun, NAR chief economist, said: "A big jump in existing sales in the South and West last month helped the housing market recover from a two-month sales slump. The very healthy US economy and labour market are creating a sizeable interest in buying a home in early 2018. However, even as seasonal inventory gains helped boost sales last month, home prices - especially in the West - shot up considerably. Affordability continues to be a pressing issue because new and existing housing supply is still severely sub-par.
"The unseasonably cold weather to start the year muted pending sales in the Northeast and Midwest in January and ultimately led to their sales retreat last month. Looking ahead, several markets in the Northeast will likely see even more temporary disruptions from the large winter storms that have occurred in March."
Ian Shepherdson, chief of economist at Pantheon Macroeconomics, said: "This is a relief, because the pending sales index pointed to a very weak report, while analysis of the regional realtor data signalled only a modest increase. Note too that all the increase in sales is in the key single-family component, up 4.2% m/m, while multi-family sales, which are very volatile fell 6.5%. Still, existing home sales continue to run well below the pace implied by the strength of mortgage demand late last year, for reasons which aren't clear. This suggests either that sales will rise markedly over the next few months, or that activity has been depressed by fear of rising interest rates and/or the limiting of the mortgage interest tax deduction.
"Home prices continue to rise, with the median single-family home price up 5.9% y/y in February, a bit above the underlying trend but not as big an increase as implied by the very low and still falling level of inventory."
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