WASHINGTON – March 22, 2019 – Existing-home sales rebounded strongly in February, with the largest month-over-month gain since December 2015, according to the National Association of Realtors® (NAR). Three of the four major U.S. regions saw sales gains, while the Northeast remained unchanged from last month.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – shot up 11.8 percent from January to a seasonally adjusted annual rate of 5.51 million in February. However, sales are down 1.8 percent from a year ago (5.61 million in February 2018).
"A powerful combination of lower mortgage rates, more inventory, rising income and higher consumer confidence is driving the sales rebound," says Lawrence Yun, NAR's chief economist.
The median existing-home price for all housing types in February was $249,500, up 3.6 percent from February 2018 ($240,800). February's price increase marks the 84th straight month of year-over-year gains.
Total housing inventory at the end of February increased to 1.63 million, up from 1.59 million existing homes available for sale in January, a 3.2 percent increase from 1.58 million a year ago. Unsold inventory is at a 3.5-month supply at the current sales pace, down from 3.9 months in January but up from 3.4 months in February 2018.
"It is very welcoming to see more inventory showing up in the market," says Yun. "Consumer foot traffic consequently is rising as measured by the opening rate of SentriLock key boxes."
Properties remained on the market for an average 44 days in February, down from 49 days in January but up from 37 days a year ago. Forty-one percent of homes sold in February were on the market for less than a month.
Yun, who has called for more inventory over the course of 2018, says the market would benefit greatly in 2019 with additional new housing.
"For sustained growth, significant construction of moderately priced-homes is still needed. More construction will help boost local economies and more home sales will help lessen wealth inequality as more households can enjoy in housing wealth gains," Yun says. A typical homeowner accumulated an estimated $8,700 in housing equity over the past 12 months and $21,300 over the past 24 months.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.37 percent in February from 4.46 percent in January. The average commitment rate across all of 2018 was 4.54 percent.
"We're very happy to see homebuyers returning to the market, as the beginning of Spring represents a prime time to purchase a new home," says NAR President John Smaby. "Potential buyers and sellers should seek out a local Realtor to stay abreast of the market and take advantage of the various housing benefits that are currently being extended during housing transactions."
First-time buyers were responsible for 32 percent of sales in February, up from last month and a year ago (both 29 percent).
All-cash sales accounted for 23 percent of transactions in February, equal to January's percentage but marginally down from a year ago (24 percent). Individual investors, who account for many cash sales, purchased 16 percent of homes in February, identical to January's 16 percent, but a tick up from a year ago (15 percent).
Distressed sales – foreclosures and short sales – represented 4 percent of sales in February, equal to both the 4 percent represented in January and at this time a year ago. One percent of February sales were short sales.
Single-family and condo/co-op sales Single-family home sales sit at a seasonally adjusted annual rate of 4.94 million in February, up from 4.36 million in January and down 1.4 percent from 5.01 million a year ago. The median existing single-family home price was $251,400 in February, up 3.6 percent from February 2018.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 570,000 units in February, unchanged from last month and down 5.0 percent from a year ago. The median existing condo price was $233,300 in February, which is up 3.1 percent from a year ago.
Regional breakdown February existing-home sales numbers in the Northeast were identical to last month. The annual rate of 690,000 is 1.5 percent above a year ago. The median price in the Northeast was $272,900, which is up 3.8 percent from February 2018.
In the Midwest, existing-home sales rose 9.5 percent from last month to an annual rate of 1.27 million, roughly even to February 2018 levels. The median price in the Midwest was $188,800, which is up 5.4 percent from last year.
Existing-home sales in the South grew 14.9 percent to an annual rate of 2.39 million in February, down 0.4 percent from last year. The median price in the South was $219,300, up 2.5 percent from a year ago.
Existing-home sales in the West rocketed 16.0 percent to an annual rate of 1.16 million in February, 7.9 percent below a year ago. The median price in the West was $379,300, up 3.0 percent from February 2018.