Existing-home sales fell in February after increasing in January, while the inventory of unsold properties rose from a historic low the month before, the National Association of REALTORS® said.
Total existing-home sales, which are completed transactions, including single-family homes, townhomes, condominiums and co-ops, fell 7.2% from January to a seasonally adjusted annual rate of 6.02 million in February. Year over year, sales were down 2.4% from 6.17 million transactions in February 2021.
The median existing-home price for all housing types in February was $357,300, up 15% from a year before, as median prices rose in each region.
Total housing inventory at the end of last month stood at 870,000 units, up 2.4% from January and down 15.5% from a year earlier. January’s unsold inventory represented a 1.7-month supply at the current sales pace, up from 1.6 months in January and two months 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 press release. “Some who had previously qualified at a 3% mortgage rate are no longer able to buy at the 4% rate.”
Properties typically remained on the market for 18 days in February, down from 19 days in January and 20 days last year. Eighty-four percent of homes sold in January were on the market for less than a month.
“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.”
By property type, single-family home sales rose to a seasonally adjusted annual rate of 5.35 million, down 7% from 5.75 million in January and down 2.2% from a year earlier. The median existing single-family home price was $363,800, up 15.5% on a year-over-year basis.
Existing condominium and co-op sales came in at a seasonally adjusted annual rate of 670,000 units in February, down 9.5% from 740,000 in the previous month and down 4.3% compared to February 2021. The median existing condo price rose 10.9% year over year to $305,400.
In February, first-time buyers were responsible for 29% of sales, up from 27% in January and down from 31% in February 2021, while individual investors or second-home buyers, who make up many cash sales, purchased 19% of homes, down from 22% in January and up from 17% in February 2021.
By major U.S. region, sales of existing homes were down across the board on a month-over-month basis, led by the Northeast, where they dropped 11.5%, and the Midwest, where they fell 11.3%, followed by the South with a 5.1% decline and the West with a 4.7% decrease.