NAR: Existing-Home Sales Fell in February

February sales fell 7.2% from January to a seasonally adjusted annual rate of 6.02 million. Total registered sales were down by 2.4% from 6.17 million a year ago.

“Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases,” NAR chief economist Lawrence Yun said in a statement. “Monthly payments have risen by 28% from one year ago – which interestingly is not a part of the consumer price index – and the market remains swift with multiple offers still being recorded on most properties.”

The median existing-home price rose 15.0% from February 2021 to $357,300. All regions posted increased pricing last month, marking the 120th straight month of year-over-year gains, and the longest-running streak on record.

“The sharp jump in mortgage rates and increasing inflation is taking a heavy toll on consumers’ savings,” Yun said. “However, I expect the pace of price appreciation to slow as demand cools and as supply improves somewhat due to more home construction.”

Total housing inventory at the end of February rose 2.4% from January to 870,000 units but was down 15.0% from one year ago. Inventory is at a 1.7-month supply at the current sales pace. Properties averaged 18 days on the market in February, one day less than January’s total and down 20 days from the same period a year ago.

NAR reports that 84% of homes sold in February were on the market for less than a month. First-time buyers accounted for 29% of sales last month, up from 27% in January and down from 31% year on year.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.76% in February, up from 3.45% in the month prior. The average commitment rate across all of 2021 was 2.96%.

By David Schollaert, David@SteelMarketUpdate.com