Existing-home sales climbed 11.8 percent from January to a seasonally adjusted annual rate of 5.51 million in February, according to the latest data from the National Association of Realtors (NAR). Despite the big uptick, sales were still down 1.8 percent year-over-year.
“A powerful combination of lower mortgage rates, more inventory, rising income and higher consumer confidence is driving the sales rebound,” NAR Chief Economist Lawrence Yun said in a statement.
Cheryl Young, the senior economist at Trulia said in a statement that the upward motion shows the housing market is beginning to rebound.
“With spring home buying season around the bend, sliding mortgage rates and moderating home prices will continue to boost demand and drive sales,” said Young. “30-year fixed-rate mortgages have fallen since the start of the year, and with the Fed’s meeting this week signaling a dovish outlook on the economy, suggest mortgage rates shows no signs of picking back up anytime soon.”
The median sales price jumped up year-over-year for the 84th straight month, but the increases are getting smaller. The median existing-home sale price was $249,500, up 3.6 percent from February 2018.
Inventory also continues to increase, with total housing inventory at the end of the month at 1.63 million, up 3.2 percent year-over-year. Unsold inventory is still only a 3.5-months supply, however.
“Withering existing-home sales and home price appreciation over the past year means that inventory is also accumulating and will bring more home buyers into the fold,” Trulia Senior Economist Cheryl Young said in a statement.
“Other indicators point to a slower housing market, which may bring some modicum of relief to prospective home buyers: for-sale homes are staying on the market longer after years of frenzied home buying, and price cuts on listed homes are on the uptick.”
“But still-high home prices and relatively low inventory will continue to present affordability pressures, especially for first-time home buyers,” Young added.