Existing-home sales dropped 0.4% in February even while home prices continued to grow.
According to data released by the National Association of Realtors this morning, total existing-home sales came in at a seasonally adjusted annual rate of 4.60 million in February, compared to 4.62 million the previous month. This is also 7.1% below February 2013 levels, and the slowest pace of sales since July 2012.
Meanwhile, single-family home sales came down 0.2% to a seasonally adjusted annual rate of 4.04 million, which is 6.9% below the sales pace in February 2013.
NAR president Steve Brown said that student debt may be contributing to a weak number of first-time buyers (who accounted for 28% of purchases in February, down from 30% a year ago).
“It’s clear there are other people who would like to buy a home that are not in the market because of debt issues, so we can expect a lingering impact of delayed home buying,” Brown added.
The median existing-home price was $189,000, a 9.1% improvement since February 2013. For single-family homes, the median price was $189,200, up 9.0%. The NAR noted that price gains have added an additional $4 trillion of housing wealth recovery over the past three years.
“We had ongoing unusual weather disruptions across much of the country last month, with the continuing frictions of constrained inventory, restrictive mortgage lending standards and housing affordability less favorable than a year ago,” said NAR chief economist Lawrence Yun. “Some transactions are simply being delayed, so there should be some improvement in the months ahead. With an expected pickup in job creation, home sales should trend up modestly over the course of the year.”
With total housing inventory rising 6.4% in February, it's possible that prices may level off a bit in the months ahead. The current inventory of 2.00 million existing homes for sale represents a 5.2-month supply at the current sales pace, up from 4.9 months in January and 4.6 months a year ago.