Economic Snapshot: Existing home sales drop in February

Photo credit to Dan Moyle

Existing home sales dropped in February but are up year over year. Conversely, new home sales were up in February but below sales in February 2015.

Existing home sales

Total existing home sales dropped 7.1 percent to a seasonally adjusted annual rate of 5.08 million in February, down from 5.47 million in January. However, sales are still 2.2 percent higher than the previous year.

Lawrence Yun, NAR chief economist, says existing sales disappointed in February and failed to keep pace with what had been a strong start to the year.

"Sales took a considerable step back in most of the country last month, and especially in the Northeast and Midwest," he said. "The lull in contract signings in January from the large East Coast blizzard, along with the slump in the stock market, may have played a role in February's lack of closings. However, the main issue continues to be a supply and affordability problem. Finding the right property at an affordable price is burdening many potential buyers."

The median existing home price for all housing types in February was $210,800, up 4.4 percent from February 2015. February’s price increase marks the 48th consecutive month of year-over-year gains.

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Total housing inventory at the end of February increased 3.3 percent to 1.8 million existing homes available for sale, but is 1.1 percent lower than the previous year. Unsold inventory is at a supply of 4.4 months at the current sales pace, up from 4.0 months in January.

New home sales

Sales of new single-family houses were at a seasonally adjusted annual rate of 512,000 in February. This is 2.0 percent above the revised January rate of 502,000 but is 6.1 percent below the February 2015 estimate of 545,000.

The median sales price of new houses sold in February was $301,400 and the average sales price was $348,900.

The seasonally adjusted estimate of new houses for sale at the end of February was 240,00, which represents a supply of 5.6 months at the current sales rate.

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