Existing-Home Sales Rise Marginally in February – NMP Skip to main content

Existing-Home Sales Rise Marginally in February

NationalMortgageProfessional.com
Mar 23, 2015

Existing-home sales increased modestly in February, but constrained inventory levels pushed price growth to its fastest pace in a year, according to the National Association of Realtors (NAR), as total existing-home sales, defined as completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.2 percent to a seasonally-adjusted annual rate of 4.88 million in February from 4.82 million in January. Sales are 4.7 percent higher than a year ago and above year-over-year totals for the fifth consecutive month.

The median existing-home price for all housing types in February was $202,600, which is 7.5 percent above February 2014. This marks the 36th consecutive month of year-over-year price gains and the largest since last February (8.8 percent).

“Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels,” Lawrence Yun, NAR chief economist, said. “Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise. Severe below-freezing winter weather likely had an impact on sales as more moderate activity was observed in the Northeast and Midwest compared to other regions of the country."

Total housing inventory at the end of February increased 1.6 percent to 1.89 million existing homes available for sale, but remains 0.5 percent below a year ago (1.90 million). For the second straight month, unsold inventory is at a 4.6-month supply at the current sales pace. 

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage (FRM) in February slightly rose to 3.71 percent from 3.67 percent in January, marking the first monthly increase since September 2014. 

“With all indications pointing to a rate increase from the Federal Reserve this year—perhaps as early as this summer—affordability concerns could heighten as home prices and rents both continue to exceed wages,” said Yun.

A NAR study released earlier this month found that the disparity between rent and income growth is widening in metro areas throughout the country and is making it harder for renters to become homeowners.

The percent share of first-time homebuyers was 29 percent in February, up from 28 percent in January and the first increase since November 2014. First-time homebuyers represented 28 percent of all buyers in February 2014.

All-cash sales were 26 percent of transactions in February, down from 27 percent in January and down considerably from a year ago (35 percent). Individual investors, who account for many cash sales, purchased 14 percent of homes in February, down from 17 percent last month and 21 percent in February 2014. Sixty-seven percent of investors paid cash in February.

Distressed sales—foreclosures and short sales—were 11 percent of sales in February, unchanged for the third consecutive month and down from 16 percent a year ago. Eight percent of February sales were foreclosures and three percent were short sales. Foreclosures sold for an average discount of 17 percent below market value in February (15 percent in January), while short sales were discounted 15 percent (12 percent in January). 

“Investor sales are trending downward due to the continued rise in prices and fewer bargains available from distressed properties coming onto the market,” says NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark. “Furthermore, Realtors in areas popular to foreign buyers, such as South Florida and the West Coast, are reporting tempered demand from international clients—who typically pay in cash—due to the strengthening U.S. dollar compared to foreign currencies.”

Properties typically stayed on the market for 62 days in February, down from 69 days in January and unchanged from a year ago. Short sales were on the market the longest at a median of 120 days in February, while foreclosures sold in 58 days and non-distressed homes took 61 days. Thirty-four percent of homes sold in February were on the market for less than a month.

Single-family home sales increased 1.4 percent to a seasonally adjusted annual rate of 4.34 million in February from 4.28 million in January, and are 5.9 percent above the 4.10 million pace a year ago. The median existing single-family home price was $204,200 in February, up 8.2 percent from February 2014.

Existing condominium and co-op sales were at a seasonally adjusted annual rate of 540,000 units in February, unchanged from January, but 3.6 below February 2014 (560,000 units). The median existing condo price was $190,200 in February,which is 2.8 percent higher than a year ago.

February existing-home sales in the Northeast dropped 6.5 percent to an annual rate of 580,000, but are still 3.6 percent above a year ago. The median price in the Northeast was $241,800, which is 3.3 percent above a year ago. In the Midwest, existing-home sales were at an annual level of 1.08 million in February, unchanged from January and 4.9 percent above February 2014. The median price in the Midwest was $152,900, up 8.8 percent from a year ago. Existing-home sales in the South increased 1.9 percent to an annual rate of 2.11 million in February, and are now six percent above February 2014. The median price in the South was $177,900, up 8.5 percent from a year ago. Existing-home sales in the West climbed 5.7 percent to an annual rate of 1.11 million in February, and are now 2.8 percent above a year ago. The median price in the West was $290,100, which is 4.2 percent above February 2014.

Published
Mar 23, 2015
Chairman Xu Sells Off Personal Assets To Avoid Default

The Evergrande saga continues as Chairman Xu Jiayin sells off 7 billion yuan ($1.1 billion) of his personal assets to prop up the deflating property giant.

Industry News
Nov 23, 2021
OptiFunder Secures $25 Million In Capital

OptiFunder, a warehouse management system provider for mortgage originators, raised $25 million in additional capital lead by Arthur Ventures, a growth capital firm focused on high-growth, founder-led and capital efficient B2B software companies.

Tech
Nov 23, 2021
Mortgage Company Donates $100K To High School In Memory Of Fallen U.S. Navy Corpsman

Cleveland-based CrossCountry Mortgage donated $100,000 to Milan Edison High School in memory of U.S. Navy Corpsman, Maxton W. Soviak, who died while assisting in the evacuation of Americans and refugees in Afghanistan in August.

Community
Nov 23, 2021
MISMO Seeks To Standardize Pre-Closing Title Data

Forming workgroup to focus on standardizing document datasets to streamline process and increase efficiency.

Industry News
Nov 23, 2021
Pandemic's Impact On Real Estate Around The World

Although the impact of the COVID-19 pandemic on the real estate industry has been well-documented within the United States, it’d be prudent to know how the global event impacted other countries as well. 

Industry News
Nov 22, 2021
Housing Market Potential Strengthens Modestly

First American Financial Corporation's Potential Home Sales Model for October 2021 reported that potential existing-home sales increased 0.1% month-over-month to 6.27 million, with household formation continuing to grow, largely driven by millennials.

Analysis and Data
Nov 22, 2021