February Existing-Home Sales Up Strongly From a Year Ago
March 22, 2012
While February existing-home sales declined from an upwardly revised January pace, they are well above a year ago, according to the National Association of REALTORS® (NAR). Sales were up in the Midwest and South, offset by declines in the Northeast and West. NAR also reported that the median home price posted a slight gain.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, slipped 0.9 percent to a seasonally adjusted annual rate of 4.59 million in February from an upwardly revised 4.63 million in January, but are 8.8 percent higher than the 4.22 million-unit level in February 2011.
Lawrence Yun, NAR chief economist, said underlying factors are much better compared to one year ago. “The market is trending up unevenly, with record high consumer buying power and sustained job gains giving buyers the confidence they need to get into the market,” he reports. “Although relatively unusual, there will be rising demand for both rental space and homeownership this year. The great suppression in household formation during the past four years was unsustainable, and a pent-up demand could burst forth from the improving economy.”
NAR President Moe Veissi said market conditions are improving. “Supply and demand have become more balanced in more markets, but with tight supply in the lower price ranges – particularly in the West,” he explains. “When markets are balanced, we normally see prices rise one to two percentage points above the rate of inflation, but foreclosures and short sales are holding back median prices.”
The national median existing-home price for all housing types was $156,600 in February, up 0.3 percent from February 2011. Distressed homes—foreclosures and short sales sold at deep discounts—accounted for 34 percent of February sales (20 percent were foreclosures and 14 percent were short sales), down from 35 percent in January and 39 percent in February 2011.