Existing-home sales were at a seasonally adjusted annual rate of 5.54 million in February, an increase of 3.0% compared with 5.38 million in January and up 1.1% compared with February 2017, according to the National Association of Realtors (NAR).
The increase comes after two consecutive months of declines.
Regionally, existing-home sales increased 11.4% in the West and 6.6% in the South. However, they fell 12.3% in the Northeast and 2.4% in the Midwest.
The increase came despite the fact that lack of inventory and rising home prices have been holding the market back.
“A big jump in existing sales in the South and West last month helped the housing market recover from a two-month sales slump,” says Lawrence Yun, chief economist for NAR, in a statement. “The very healthy U.S. economy and labor market are creating a sizable interest in buying a home in early 2018. However, even as seasonal inventory gains helped boost sales last month, home prices – especially in the West – shot up considerably. Affordability continues to be a pressing issue because new and existing housing supply is still severely subpar.
“The unseasonably cold weather to start the year muted pending sales in the Northeast and Midwest in January and ultimately led to their sales retreat last month,” Yun adds. “Looking ahead, several markets in the Northeast will likely see even more temporary disruptions from the large winter storms that have occurred in March.”
The median existing-home price for all housing types in February was $241,700, up 5.9% compared with $228,200 in February 2017.
February’s price increase marks the 72nd straight month of year-over-year gains.
As of the end of February there were about 1.59 million existing homes available for sale, about a 3.4-month supply at the current sales pace.
That’s 8.1% less inventory than a year ago, according to NAR.
Properties typically stayed on the market for 37 days in February, down from 41 days in January and down from 45 days a year ago.
Forty-six percent of homes sold in February were on the market for less than a month.
“Mortgage rates are at their highest level in nearly four years, at a time when home prices are still climbing at double the pace of wage growth,” says Yun. “Homes for sale are going under contract a week faster than a year ago, which is quite remarkable given weakening affordability conditions and extremely tight supply. To fully satisfy demand, most markets right now need a substantial increase in new listings.”