Sales of homes owned before in February increased by 4.2% from January to 4.2 million units on a seasonally adjusted annual basis, according to the National Association of Realtors. Industry analysts were hoping for a 3% drop.
Sales were 1.2% lower than last February.
Because this count is based on the closure, mortgage rates rose and contracts were signed in December and January, when mortgage rates were temporarily held at a 30-year fixed 7% range. Today’s rates range in 6%.
“Homebuyers are slowly entering the market,” said Lawrence Yun, chief economist at NAR, in the release. “Mortgage prices haven’t changed much, but more inventory and options are freeing up pent-up housing needs.”
Sales were high annually in the highest price category, exceeding $750,000. Median sales fell 3% year-on-year.
Inventory at the end of February was 1.24 million units, an increase of 17% from the previous year, but at the current sales pace, the supply was 3.5 months. The six-month supply is considered to be balanced between the buyer and seller.
“We are still in a relatively tough market,” Yun said.
That harsh supply puts pressure on prices. The median price of homes sold in February was $398,400, up 3.8% from the same period last year. That’s a record high in February. All four geographical regions of the country have seen prices rise.
“For Sale” sign outside your home in Atlanta, Georgia.
Dustin Chambers | Bloomberg | Getty Images
First-time buyers returned to the market, accounting for 31% of February’s sales, compared to 26% the previous year. However, investors have pulled back, down from 21% last year, accounting for just 16% of sales.
However, total cash sales remained relatively stable at 32% of sales, a slight decline from the previous year. Cash is usually preferred by investors, so given the decline in investors’ sales, it suggests that more owners are using cash.
These sales were higher than expected, but show a better market than they were two months ago. Another survey of real estate agents in February from John Barnes Research and Consulting showed that over half of respondents were weaker than usual this spring. This resale index fell for the first time in four months.
“Current sales ratings remain weak, with 53% of agents reporting weaker than normal sales, which is better than 56% a year ago, but lower than 47% in January.
