Research >> Economics
Existing-Home Sales declined 9.6% in February
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Existing-home sales fell in February following three straight monthly increases, according to the National Association of REALTORS®.
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 9.6 percent to a seasonally adjusted annual rate of 4.88 million in February from an upwardly revised 5.40 million in January, and are 2.8 percent below the 5.02 million pace in February 2010.
Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers. This tug and pull is causing a gradual but uneven recovery. Existing-home sales remain 26.4 percent above the cyclical low last July.
A parallel NAR practitioner survey shows first-time buyers purchased 34 percent of homes in February, up from 29 percent in January; they were 42 percent in February 2010.
All-cash sales were a record 33 percent in February, up from 32 percent in January; they were 27 percent in February 2010. Investors accounted for 19 percent of sales activity in February, down from 23 percent in January; they were 19 percent in February 2010. The balance of sales were to repeat buyers.
The national median existing-home price for all housing types was $156,100 in February, which is 5.2 percent below February 2010. Distressed homes – sold at discount – accounted for a 39 percent market share in February, up from 37 percent in January and 35 percent in February 2010. The decline in price corresponds to the record level of all-cash purchases where buyers – largely investors – are snapping up homes at bargain prices. We’d be seeing greater numbers of traditional home buyers if mortgage credit conditions return to normal.
Total housing inventory at the end of February rose 3.5 percent to 3.49 million existing homes available for sale, which represents an 8.6-month supply4 at the current sales pace, up from a 7.5-month supply in January.
Posted: March 21, 2011 Monday 10:00 AM