Declining affordability and disruptively cold weather stymied sales of existing homes in February, but the number of homes for sale climbed heading into the spring buying season, the National Association of Realtors reported.
“Some transactions are simply being delayed, so there should be some improvement in the months ahead,” said NAR Chief Economist Lawrence Yun in a statement. “With an expected pickup in job creation, home sales should trend up modestly over the course of the year.”
Existing-home sales edged down 0.4 percent from January to February, to a seasonally adjusted annual rate of 4.6 million, a 7.1 percent decline from the same time a year ago, NAR said.
Besides unusually cold weather and strict lending standards, housing observers say that substantial increases in both home prices and mortgages rates — which RealtyTrac said pushed up the cost of financed homeownership by nearly a quarter over the last year — have recently locked more would-be buyers out of the market.
NAR reported today that the median existing-home price increased 9.1 percent year over year to $189,000 in February, and Fannie Mae said rates on 30-year fixed-rate mortgages averaged 4.32 percent, up from 3.54 percent a year ago.
Scarce housing supply has also curtailed home sales, according to many experts. But the inventory shortage has eased recently.
Housing inventory rose 6.4 percent from January to 2 million homes, a 5.3 percent increase from a year ago, NAR said. February’s inventory represented a supply of homes that would last 5.2 months at the current sales rate, up from 4.9 months in January and 4.6 months a year ago.
Realtor.com recently reported that the number of homes for sale jumped 10 percent in February from a year ago. The increase in supply, taken in hand with still-appreciating home prices, prompted Steve Berkowitz, CEO of realtor.com operator Move Inc, to declare, “This is the market these sellers have been waiting for.”