In a not-so-shocking shift given other compounding factors, sales of both new and existing-homes declined in the month of February, according to data released from leading agencies. With mortgage rates appreciating at an unprecedented pace, some market experts are beginning to taper their expectations for sales performance through the year. Keep reading below for a brief review of the major takeaways in this months’ markets reports.
Existing-Home Sales Decline
Following a month of increases (January), February 2022’s existing-home sales dropped by 7.2% according to the latest report from the National Association of Realtors. Equalling 6.02 million units, this was also a 2.4% (6.17 million) decrease compared to February 2021’s sales.
The Southern region was the only part of the country that had an increase of sales, while the East, West, and North all experienced declines. Lawrence Yun, NAR’s Chief Economist, continued to point at affordability as a driver for the decrease, stating:
Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases…
As noted by Yun, prices continued to climb in February. The median existing-home price in February was $357,300, which is a 15% increase compared to Feb. 2021. This marked the 120th straight month of price appreciation for existing-homes.
Inventory also remained low, but improved from January. Total housing inventory at the end of the month was 870K units, an increase of 2.4% from January but still down 15.5% from February 2021. Existing-homes were typically on the market for 18 days.
New-Home Sales Have Slight Drop
New-home sales experienced a much less significant decline in comparison, dropping only 2% for the month compared to January, to a seasonally adjusted rate of 772,000 units, according the latest figures from the Census Bureau and U.S. Department of Housing and Urban Development. This is a 6.2% decline compared to February 2021’s rate of 823,000.
Prices were high for the month but did partly drop compared to January, with the median sales price at $400,600 and the average sales price at $511,000. Inventory also remained an issue, and the month ended with an estimate of 407,000 units available.
The market is swiftly changing, and you clients will need to adjust their expectations and preferences to change with it and find success. Support them with this data and connect now to encourage they move before mortgage rates climb even higher.