Existing-home sales declined slightly in February, with modest gains in the Northeast and Midwest offset by softer sales in the South and West, according to the National Association of Realtors (NAR).
Existing-home sales slipped 0.6% nationally to a seasonally adjusted annual rate of 5.02 million units in February from 5.05 million in January, but are 7% higher than the 4.69 million-unit pace in February 2009.
Lawrence Yun, NAR's chief economist, says widespread winter storms in February may mask underlying demand.
"Some closings were simply postponed by winter storms, but buyers couldn't get out to look at homes in some areas, and that should negatively impact near-term contract activity," he says.
Total housing inventory at the end of February rose 9.5% to 3.59 million existing homes available for sale, which represents an 8.6-month supply at the current sales pace – up from a 7.8-month supply in January. Raw unsold inventory is 5.5% below a year ago.
"The key test for a durable recovery comes in the next few months, as the tax-credit deadline approaches," Yun adds. "If we see a surge in home buying comparable to last fall in the months leading up to the original tax-credit deadline, then enough inventory should be absorbed to ensure a broad home-price stabilization."
The national median existing-home price for all housing types was $165,100 in February, which is 1.8% below February 2009. Distressed homes, generally sold at discount, accounted for 35% of sales last month.
A parallel NAR practitioner survey shows first-time buyers purchased 42% of homes in February – up from 40% in January. Investors accounted for 19% of transactions in February, compared with 17% in January; the remaining sales were to repeat buyers.
Regionally, existing-home sales rose 2.4% and 2% in the Northeast and Midwest, respectively. Sales fell 1.1% in the South and 4.7% in the West.
SOURCE: National Association of Realtors