Existing-home sales fell by 6.6% in February to a seasonally adjusted annual rate of 6.22 million, according to the National Association of Realtors (NAR). Sales rose year-over-year, up 9.1% from February 2020. First-time buyers were responsible for 31% of sales in February, down from 33% in January and from 32% in February 2020
Lawrence Yun, NAR’s chief economist, states that demand from buyers remains high but record low inventory is slowing down sales. He also noted that as economic conditions improve, higher prices and rising mortgage rates could cut into home affordability. “I still expect this year’s sales to be ahead of last year’s, and with more COVID-19 vaccinations being distributed and available to larger shares of the population, the nation is on the cusp of returning to a sense of normalcy,” Yun said. “Many Americans have been saving money and there’s a strong possibility that once the country fully reopens, those reserves will be unleashed on the economy.”
The total housing inventory in February was 1.03 million units, a record low and unchanged from January. Inventory was down 29.5% from one year ago (1.46 million). The median home price was $313,000, up 15.8% from February 2020 ($270,400), as prices rose in every region. This marks 108 straight months of year-over-year gains.
Distressed sales represented less than 1% of sales in February, equal to January’s percentage but down from 2% in February 2020.
Read the NAR release.