Existing-home sales and prices dropped in February compared to the same month last year, the National Association of Realtors trade group reported today, while rising since January 2007.
The median price of existing homes fell 1.3 percent in February to $212,800 compared to the median price in February 2006, and the average price dropped 0.4 percent, to $260,100.
Sales reached a seasonally adjusted annual rate of 6.69 million in February, a 3.6 percent drop compared to February 2006 and a 3.9 percent rise compared to January 2007. This rate is a projection of a monthly sales total over a 12-month period, adjusted to account for seasonal fluctuations in sales activity.
The January-to-February sales increase was the largest monthly rise in three years, the Realtor group reported — sales rose 3.9 percent from February to March in 2004. And the February sales rate was the highest since April 2006, when the rate reached 6.71 million.
David Lereah, NAR’s chief economist, said in a statement that the February gain was a surprise. “Some of the rise in home sales may be from mild weather that brought out shoppers in December, but fundamentals have improved in the housing market and buyers see a window now with historically low mortgage interest rates and competitive pricing by sellers,” he stated.
“Even so, winter storms last month discouraged shopping, and buyers were chilled with the third-coldest February on record. These unusual weather patterns mean home sales that close in March may decline before rebounding later this spring.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.16 percent in the last week, down from an average of 6.29 percent in February. The 30-year fixed was 6.22 percent in January and 6.25 percent in February 2006.
Pat Vredevoogd Combs, NAR president and vice president of the Coldwell Banker-AJS-Schmidt brokerage company in Michigan, said the median home price is currently distorted. “Over the last year, we’ve seen declining sales in many high-cost areas but rising activity in lower-cost markets,” she said in a statement. “This change in the geographic composition of sales means we aren’t getting apples-to-apples comparisons in median home prices from a year ago.”
“Home prices are soft — a year ago we were still seeing bidding pressures and double-digit price growth,” Combs said. “Overall, home prices should rise slowly this year.”
Total housing inventory levels rose 5.9 percent at the end of February to 3.75 million existing homes available for sale, which represents a 6.7-month supply at the current sales pace compared with a 6.6-month supply in January. Raw inventories peaked last July at 3.86 million, and supplies topped at 7.4 months in October.
Single-family home sales increased 3.7 percent to a seasonally adjusted annual rate of 5.88 million in February from 5.67 million in January, and are 3.4 percent below the 6.09 million-unit pace in February 2006. The median existing single-family home price was $211,100 in February, down 1.5 percent from a year ago.
Existing condominium and co-op sales rose 5.3 percent to a seasonally adjusted annual rate of 810,000 units in February from a level of 769,000 in January, and are 5.2 percent below the 854,000-unit pace in February 2006. The median existing-condo price was $225,400 in February, up 0.5 percent compared to February 2006.
Regionally, existing-home sales in the Northeast rose 14.2 percent from January to February and increased 3.4 percent compared to February 2006. The median existing-home price in the Northeast was $265,900, down 1.4 percent from a year earlier.
In the Midwest, existing-home sales rose 3.9 percent from January to February and dropped 1.9 percent compared to February 2006. The median price in the Midwest was $157,000, down 1.3 percent compared to February 2006.
Existing-home sales in the South increased 1.6 percent from January to February and were 4.4 percent below the February 2006 rate. The median price in the South was $175,900, down 2.9 percent compared to February 2006.
Existing-home sales in the West were flat in February compared to January and were 9.6 percent below the sales rate in February 2006. The median price in the West was $337,100, up 2.2 percent compared to February 2006.
Existing-home sales include single-family, townhomes, condominiums and co-ops, and are based on transaction closings. Existing-home sales generally account for 85 percent of total home sales and typically are not subject to large prior-month revisions, the association noted.