Connect with us

Hi, what are you looking for?

The American Genius Real EstateThe American Genius Real Estate

Real Estate Big Data

Home sales slip in February, prices jump 15% annually

(REAL ESTATE) Home sales fell in February, home prices continue to rise, and inventory levels loosened slightly – let’s dive into what this teeter totter of data means.

home price

Existing home sales slid 7.2% in February across all regions, compared to January, and fell 2.4% from a year ago, according to the National Association of Realtors (NAR). The median home sales price jumped 15% from a year ago, hitting $357,300, the 120th consecutive month of annual price increases (the longest streak on record).

Inventory levels loosened slightly rising to 870,000 units, the equivalent of 1.7 months of supply at the current monthly sales pace.

These conditions continue to plague housing affordability, which is particularly frustrating for first time home buyers who are pre-approved, with down payment in hand, ready to buy, but continue to be squeezed out of the market.

“Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases,” said Dr. Lawrence Yun, NAR’s Chief Economist. “Some who had previously qualified at a 3% mortgage rate are no longer able to buy at the 4% rate.”

But it’s not just about affordability.

“Monthly payments have risen by 28% from one year ago,” said Dr. Yun, “which interestingly is not a part of the consumer price index – and the market remains swift with multiple offers still being recorded on most properties.”

Moving forward, Dr. Yun asserts that inflation will continue to hit consumers’ savings, but expects the pace of price appreciation to slow as demand cools and housing supply improves (if housing starts continue to improve).

The average days on market shrank again, down to 18 days in February, from 19 in January, and 20 in February 2021. That sounds promising, but with 84% of all homes sold in February staying on the market for under a month.

One bright spot of the report was the uptick in first-time buyers which accounted for 29% of sales in February, having dipped down to 27% in January.

Meanwhile, all-cash sales accounted for 25% of transactions in February, down from 27% in January (yet up from only 22% in February 2021). Talk about mixed news for first time buyers.

Regionally, existing home sales fell 11.5% in February in the Northeast, 11.3% in the Midwest, 5.1% in the South, and 4.7% in the West.

Mortgage Bankers Association (MBA) Chief Economist, Dr. Mike Fratantoni said, “It is tempting to blame the decline on the recent run-up in mortgage rates. However, given that last month’s sales numbers represent closings, the decline in sales came at a time earlier this year when rates were lower. The more likely reasons for the drop in sales were the ongoing lack of housing inventory and the resulting increase in home values that priced some buyers out of the market.”

He concluded that, “From a lending perspective, while the number of sales declined somewhat, with 15% home-price growth, the dollar volume of sales and purchase originations have increased over the past year.”

The American Genius' real estate section is honest, up to the minute real estate industry news crafted for industry practitioners - we cut through the pay-to-play news fluff to bring you what's happening behind closed doors, what's meaningful to your practice, and what to expect in the future. Consider us your competitive advantage.

Advertisement

The Daily Intel
in your inbox

Subscribe and get news and EXCLUSIVE content to your email inbox.

Advertisement

KEEP READING!

Real Estate Big Data

Home sales are sliding after an overheated 2021, will this trend continue?

Real Estate Big Data

Existing home sales are down across the board, and may "soon stabilize," says NAR's chief economist.

Real Estate Big Data

(REAL ESTATE NEWS) Home sales dip for a fourth consecutive month in May - what does this mean for the housing market going forward?

Real Estate Big Data

(REAL ESTATE) Home sales are looking good, but let's not pop the champagne quite yet - 2022 is still going to be a rough...

The American Genius' real estate section is honest, up to the minute real estate industry news crafted for industry practitioners - we cut through the pay-to-play news fluff to bring you what's happening behind closed doors, what's meaningful to your practice, and what to expect in the future. We're your competitive advantage. The American Genius, LLC Copyright © 2005-2022