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Existing-home sales performed strongly in February, with three out of the four major regions of the U.S. showing sales increases, the National Association of REALTORS® reported Friday. Home prices also were on the rise last month.
Total existing-home sales—accounting for single-family, townhouse, condo, and co-op transactions—increased 6.5% month over month, reaching a seasonally adjusted annual rate of 5.77 million. Sales were up 7.2% year over year, NAR reports. “February’s sales of over 5 million homes were the strongest since February 2007,” says NAR Chief Economist Lawrence Yun. “I would attribute that to incredibly low mortgage rates and a steady release of sizable pent-up housing demand that was built over recent years.”
Yun acknowledges COVID-19’s impact on the economy in March, but he notes that the impact of the virus on housing likely will be short-term given the strength of sales data prior to the outbreak. “Once the social distancing and quarantine measures are relaxed, we should see this temporary pause evaporate and potential buyers return [to the market] with the same enthusiasm,” Yun says.
He also notes that housing shortages and low mortgage rates are two factors that could drive the housing market moving forward. Yun says he believes home prices will continue to stay elevated. “Unlike the stock market, home prices are not expected to drop because of the ongoing housing shortage.”
Real estate pros are adapting their businesses in light of restrictions on social gatherings to help slow the spread of the coronavirus. “It is truly inspiring to see so many of our fellow REALTORS® and brokerages adjust on the fly,” says NAR President Vince Malta. “Agents nationwide are keeping consumer interest alive with innovative technologies, holding virtual open houses and computer-generated tours.”
Here’s a closer look at housing indicators for February from NAR’s latest report:
Home prices: The median existing-home price for all housing types in February was $270,100, up 8% from a year ago. Prices rose in every region of the U.S. in February. This marked the 96th consecutive month of year-over-year price gains.
Inventory: Housing shortages continue to abound. Total housing inventory at the end of February totaled 1.47 million units, down from 9.8% a year ago. Unsold inventory is at a 3.1-month supply at the current sales pace.
Days on the market: Forty-seven percent of homes sold in February were on the market for less than a month. Properties stayed on the market for 36 days, down from 44 days a year prior.
First-time buyers: This cohort comprised 32% of sales in February.
Investors: Individual investors or second-home buyers accounted for 17% of sales in February, up slightly from 16% a year ago. Investors tend to make up the biggest bulk of all-cash sales, which made up 20% of transactions in February.
Regional Breakdown
Here’s how home sales fared across the country in February:
Midwest: Existing-home sales rose 0.8% to an annual rate of 1.29 million, up 4% from a year ago. Median home price: $203,700, up 7.9% from a year ago.
South: Existing-home sales climbed 7.2% to an annual rate of 2.52 million in February, up 8.2% from a year ago. Median home price: $238,000, an 8.2% increase from a year ago.
Northeast: Existing-home sales dropped 4.1% in February to an annual rate of 700,000, a 2.9% uptick from a year ago. Median home price: $295,400, up 8.2% from a year ago.
West: Existing-home sales jumped 18.9% to an annual rate of 1.26 million in February, an 11.5% increase from a year ago. Median home price: $410,100, up 8.1% from a year ago.
