Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 6.5 percent from January
to a seasonally-adjusted annual rate of 5.77 million in February. Additionally, for the eighth straight month, overall sales greatly increased year-over-year, up 7.2 percent from a year ago (5.38 million in February 2019).
“February’s sales of over five million homes were the strongest since February 2007,” said Lawrence Yun, NAR’s chief economist. “I would attribute that to the incredibly low mortgage rates and the steady release of a sizable pent-up housing demand that was built over recent years.”
The median existing-home price for all housing types in February was $270,100, up eight percent from February 2019 ($250,100), as prices rose in every region. February’s price increase marks 96 straight months of year-over-year gains.
Yun noted that February’s home sales were encouraging, but not reflective of the current turmoil in the stock market or the significant hit the economy is expected to take because of the coronavirus and corresponding social quarantines.
“These figures show that housing was on a positive trajectory, but the coronavirus has undoubtedly slowed buyer traffic
and it is difficult to predict what short-term effects the pandemic will have on future sales,” Yun said.
Total housing inventory at the end of February totaled 1.47 million units, up five percent from January, but down 9.8 percent from one year ago (1.63 million). Unsold inventory sits at a 3.1-month supply at the current sales pace, equal to the supply recorded in January and down from the 3.6-month figure recorded in February 2019.
“February’s sales activity was in line with purchase applications data from our Weekly Applications Survey, showing strong growth to start 2020,” said Joel Kan’s, AVP of Economic and Industry Forecasting for the Mortgage Bankers Association (MBA). “The drop in overall economic activity and the recessionary outlook due to the coronavirus will adversely impact home sales in the coming months, offsetting some of this pre-crisis momentum, which was fueled by a strong job market and lower mortgage rates.”
First-time buyers were responsible for 32 percent of sales in February, equal to the percentages seen in both January 2020 and in February 2019. NAR’s 2019 Profile of Home Buyers and Sellers–released in late 2019–revealed that the annual share of first-time buyers was 33 percent.
“For the past couple of months, we have seen the number of buyers grow as more people enter the market,” Yun said. “Once the social-distancing and quarantine measures are relaxed, we should see this temporary pause evaporate, and will have potential buyers return with the same enthusiasm.”