Note: National Association of Realtors® (NAR) data for April is based on February data.
Following an incredibly brisk sales pace to start the year, February's existing home sales slowed but remained above levels seen a year ago, both nationally and in each major region, according to data from the National Association of Realtors® (NAR).
Total existing-home sales, which count transactions for single-family homes, townhomes, condominiums and co-ops, fell 3.7% to 5.48 million in February from January's 5.69 million. Still, February's slower sales pace is 5.4% higher than the sales activity seen one year ago during the same period.
Addressing the reason for February's slower sales, NAR's chief economist, Lawrence Yun, pointed to widespread low inventory and weakening affordability conditions around the United States. "Realtors® are reporting stronger foot traffic from a year ago, but low supply in the affordable price range continues to be the pest that's pushing up price growth and pressuring the budgets of prospective buyers," Yun said.
Housing Data Takeaways
- February's median price for existing homes (all housing types) was $228,400, up 7.7% from February 2016 ($212,100). February's price rise was the steepest since last January (8.1%) and represents 60 straight months of year-over-year increases.
- Total U.S. housing inventory at the end of February grew 4.2% to 1.75 million existing homes available for sale, however this is 6.4% lower than a year ago (1.87 million) and has dipped year-over-year for 21 consecutive months. Unsold inventory shows a supply of 3.8 months at the current sales pace (vs. 3.5 months in January).
- First-time buyers in February drove 32% of sales activity nationally, a slight drop from 33% in January but a bit above the 30 percent seen at this time last year. NAR's 2016 Profile of Home Buyers and Sellers showed the annual share of first-time buyers last year was 35 percent.
- Regarding mortgage rates, Freddie Mac data shows the average commitment rate for a 30-year, conventional, fixed-rate mortgage moved slightly higher in February, to 4.17% from January's 4.15%. The average commitment rate for all of 2016 was 3.65%.
- How long did properties remain on the market in February? Nationally, it was 45 days, down from 50 days in January and noticeably more than last year (59 days). This number will vary by region, naturally.
What's the best strategy for buyers this spring? NAR President William E. Brown, a Realtor® from Alamo, California, says being fully prepared is the right strategy for prospective buyers. "Seek a pre-approval from a lender, know what your budget is and begin discussions with a Realtor® early on about your housing wants and needs," he said. "Homes in many areas are selling faster than they were last spring. A buyer's idea of a dream home in a popular neighborhood is probably the same as many others. That's why they'll likely have to decide quickly if they see something they like and can afford."