Revival In February Existing Home Sales End Long-Term Slump

Mortgage News April 1, 2023

According to the National Association of Realtors® (NAR), February saw a remarkable 14.5% monthly increase in existing home sales, bringing an end to a 12-month losing streak, according to the National Association of Realtors. Sales of pre-owned single-family houses, townhomes, condos, and cooperative apartments reached a seasonally adjusted annual rate of 4.58 million units, up from 4.0 million in January.

The increases in February, while notable, did not restore sales to their levels a year earlier, with total sales down 22.6 percent compared to February 2022’s 5.92 million unit rate. Analysts had predicted sales would improve but underestimated the degree of the increase. Trading Economics’ analysts had projected 4.2 million, and Econoday forecasted 4.17 million units.

Existing home median sales price ended a 131-month streak of YoY gains, dropping by 0.2% to $363,000 compared to the previous year. However, the median condo price grew by 2.5 percent to $321,000. Single-family median prices also decreased by 0.7 percent to $367,500.

Inventories remained at historic lows, with 980,000 units available at the end of February, estimated to be 2.6 months’ supply at the current monthly sales pace. This low supply resulted in multiple offers for many properties. First-time buyers accounted for 27 percent of the month’s sales, down from 31 percent in January and 29 percent in February 2022.

Despite lagging behind their February 2022 numbers, all four major regions reported significant monthly gains. In the Northeast, the median home price was $366,100, down 4.5 percent from the previous February. The Midwest saw a 5.0 percent increase in median price to $261,200, and the South experienced a 2.7 percent price increase to $342,000. In the West, median prices retreated by 5.6 percent to $541,100.

NAR Chief Economist Lawrence Yun attributed the sales increase to home buyers taking advantage of mortgage rate declines and stronger sales gains in areas where home prices are decreasing, and local economies are adding jobs. In February, the median time homes stayed on the market was 34 days, up from 33 days in January and significantly higher than the 18 days reported in February 2022. Despite the surge in sales in February, a considerable 57% of the homes sold were available for less than a month.

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