Existing-home sales slightly ticked back up 1.2% in February after last month’s plummet, but tight inventory levels pushed price growth to its fastest pace in a year, the National Association of Realtors said.
Lawrence Yun, NAR chief economist, said although February sales showed modest improvement, there’s been some stagnation in the market in recent months.
“Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels,” he said. “Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise.”
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.2% to a seasonally adjusted annual rate of 4.88 million in February from 4.82 million in January. Sales are 4.7% higher than a year ago and above year-over-year totals for the fifth consecutive month.
The median existing-home price for all housing types in February was $202,600, which is 7.5% above February 2014. This marks the 36th consecutive month of year-over-year price gains and the largest since last February with it was 8.8%.
In addition, total housing inventory at the end of February increased 1.6% to 1.89 million existing homes available for sale, but remains 0.5% below a year ago (1.90 million). For the second straight month, unsold inventory is at a 4.6-month supply at the current sales pace.
The percent share of first-time buyers barely increased, growing to 29% in February from 28% in January, marking the first increase since November 2014. First-time buyers represented 28% of all buyers in February 2014.
All-cash sales were 26% of transactions in February, down from 27% in January and down considerably from a year ago when it was 35%.
Individual investors, who account for many cash sales, purchased 14% of homes in February, down from 17% last month and 21% in February 2014. Sixty-seven percent of investors paid cash in February.
Distressed sales, foreclosures and short sales, were 11% of sales in February, unchanged for the third consecutive month and down from 16% a year ago. Eight percent of February sales were foreclosures and 3% were short sales. Foreclosures sold for an average discount of 17% below market value in February (15% in January), while short sales were discounted 15% (12% in January).
Broken up by region, the Northeast was the only region to post a drop in existing-home sales, falling 6.5% to an annual rate of 580,000, but still 3.6% above a year ago. The median price in the Northeast was $241,800, which is 3.3% above a year ago.
In the Midwest, existing-home sales were at an annual level of 1.08 million in February, unchanged from January and 4.9% above February 2014. The median price in the Midwest was $152,900, up 8.8% from a year ago.
Both the South and the West reported increases in existing-home sales.
Existing-home sales in the South increased 1.9% to an annual rate of 2.11 million in February, and are now 6% above February 2014. The median price in the South was $177,900, up 8.5% from a year ago.
Existing-home sales in the West climbed 5.7% to an annual rate of 1.11 million in February, and are now 2.8% above a year ago. The median price in the West was $290,100, which is 4.2% above February 2014.