WASHINGTON (3/21/14)--The National Association of Realtors (NAR) reported sales of existing homes were dragged down 0.4% in February by rising mortgage rates and home prices.
Seasonally adjusted, sales of existing homes came in at 4.6 million in February, down from 4.62 million in January. February's numbers were 7.1% lower than a year prior. Also, the pace of sales for the month was the lowest since the 4.59 million of July 2012.
Conditions were largely unchanged from January, said Lawrence Yun, chief economist, NAR. "We had ongoing unusual weather disruptions across much of the country last month, with the continuing frictions of constrained inventory, restrictive mortgage lending standards and housing affordability less favorable than a year ago," he said.
He noted that some transactions are simply being delayed, so there should be some improvement in the months ahead.
February's median existing-home price for single-family homes, townhomes, condos and co-ops was $189,000--9.1% above 2012. "Price gains have translated into an additional $4 trillion of housing wealth recovery over the past three years," Yun added.
Rising house prices reflect the tight inventories in spite of weaker sales, said analysts at Moody's (Economy.com March 20). Uncertainties remain, Moody's noted, as affordability is restricted even more by mortgage interest rate increases.
First-time homebuyers are particularly challenged by the level of inventory and financing options. NAR reported that the share of first-time homebuyers declined to 28% this month from 30% in February 2013.