Following two consecutive months of declines, existing-home sales rebounded 3% in February month over month and reached a seasonally adjusted annual rate of 5.54 million, the National Association of REALTORS® reported last week. Sales of existing homes, which include single-family homes, townhomes, condos, and co-ops, are now 1.1% higher than a year ago.
“A big jump in existing-home sales in the South and West last month helped the housing market recover from a two-month sales slump,” says Lawrence Yun, NAR’s chief economist. “The very healthy U.S. economy and labor market are creating a sizable interest in buying a home in early 2018.
“However,” Yun adds, “even as seasonal inventory gains helped boost sales last month, home prices—especially in the West—shot up considerably. Affordability continues to be a pressing issue because new and existing housing supply is still severely subpar.”
5 Housing Indicators to Gauge the Market
Here’s a closer look at findings from NAR’s latest housing report.
Home prices: The median existing-home price for all housing types was $241,700 in February, up 5.9% from a year ago.
Inventories: The number of homes for sale at the end of February increased 4.6% to 1.59 million. That is still 8.1% lower than a year ago. Unsold inventory is at a 3.4-month supply at the current sales pace.
All-cash sales: All-cash sales comprised 24% of transactions in February, the highest since last February (27%). Individual investors tend to account for the biggest bulk of all-cash sales. They purchased 15% of homes in February, unchanged from a year ago.
Distressed sales: Foreclosures and short sales made up 4% of sales in February, down from 7% a year ago. Broken out, 3% of February sales were foreclosures and 1% were short sales.
Days on the market: Forty-six percent of homes sold last month were on the market for less than a month. Overall, properties stayed on the market for an average of 37 days in February, down from 45 days a year ago.
“Homes for sale are going under contract a week faster than a year ago, which is quite remarkable given weakening affordability conditions and extremely tight supply,” says Yun. “To fully satisfy demand, most markets right now need a substantial increase in new listings.”