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Existing home sales increased modestly in the United States last month but prices are growing at their fastest pace for a year, the latest index data shows. Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, rose 1.25% in February and are 4.7% higher than a year ago and above year on year totals for the fifth consecutive month. The data from the National Association of Realtors also shows that the median existing home price for all housing types in February was $202,600, some 7.5% above February 2014. This marks the 36th consecutive month of year on year price gains and the largest since last February when it was 8.8%. According to Lawrence Yun, NAR chief economist, although February sales showed modest improvement, there’s been some stagnation in the market in recent months. ‘Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels,’ he said. ‘Stronger price growth is a boon for home owners 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,’ Yun explained. The data shows that total housing inventory at the end of February increased 1.6% but remains 0.5% below a year ago. For the second month in a row unsold inventory is at a 4.6 month supply at the current sales pace. The share of first time buyers was 29% in February, up slightly from 28% in January and the first increase since November 2014. First time buyers represented 28% of all buyers in February 2014. All cash sales were 26% of transactions in February, down from 27% in January and down considerably from a year ago when it was 35%. Individual investors, who account for many cash sales, purchased 14% of homes in February, down from 17% in January and 21% in February 2014. Some 67% of investors paid cash in February. Distressed sales, that is foreclosures and short sales, amounted to 11% of sales in February, unchanged for the third consecutive month and down from 16% a year ago. Some 8% of February sales were foreclosures and 3% were short sales. Foreclosures sold for an average discount of 17% below market value in February compared to 15% in January, while short sales were discounted 15% compared to 12% the previous month. ‘Investor sales are trending downward due to the continued rise in prices and fewer bargains available from distressed properties coming onto the market,’ said Chris Polychron, NAR president. He added that real estate agents in areas popular with foreign buyers, such as South Florida and the West Coast, are reporting tempered demand from international clients who typically pay in cash and this… Continue reading →
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