Existing-home sales reversed a 12-month slide in February while prices fell on a year-over-year basis for the first time since February 2012. Existing sales increased 14.5% in February, representing the largest month-over-month percentage increase since sales rose 22.4% in July 2020, according to the National Association of Realtors (NAR).
Total existing-home sales, including completed transactions for single-family homes, townhomes, condominiums, and co-ops, rose to a seasonally adjusted annual rate of 4.58 million in February. Despite the large monthly jump, existing-home sales were 22.6% lower on a year-over-year basis in February.
The median existing-home price for all housing types decreased 0.2% year over year to $363,000. Prices continued to rise in the Midwest and South, but began to fall in the Northeast and West. The year-over-year decline in the median price ends a streak of 131 consecutive months of year-over-year increases, according to the NAR.
“Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines,” says NAR chief economist Lawrence Yun. “Moreover, we’re seeing strong sales gains in areas where home prices are decreasing and the local economies are adding jobs.”
Total housing inventory at the end of February was 980,000 units, identical to January levels, but 15.3% higher than inventory levels in February 2022. According to the NAR, unsold inventory sits at a 2.6 month supply at the current sales pace, higher than 1.7 months in February 2022. Yun says because inventory levels are still at “historic lows,” multiple offers are returning for many properties in the existing-home market.
Properties typically remained on the market for 34 days in February, and 57% of homes sold in February were on the market for less than one month. First-time buyers represented 27% of existing-home sales in February, lower on both a month-over-month and year-over-year basis, according to the NAR. All-cash sales accounted for 28% of transactions and individual investors or second-home buyers represented 18% of all existing-home purchases in February.
Single-family home sales increased 15.3% month over month to an adjusted annual rate of 4.14 million in February. Single-family sales remain 21.4% lower than February 2022 levels, according to the NAR. The median existing single-family home price fell 0.7% on a year-over-year basis to $367,500.
Existing-home sales increased on a month-over-month basis in all four census regions, with the West registering the largest percentage increase (19.4%). Sales fell 18% to 29% on a year-over-year basis in all four regions. The median existing-home sales price fell 4.5% in the Northeast and 5.6% in the West and increased by 5.0% in the Midwest and by 2.7% in the South, according to the NAR.