The number of existing homes sold in February might have been a drop from the previous month, but home sales are still stronger than they have been.
In fact, last month’s sales were still well above year-ago levels.
In February, home sales dropped 3.7 percent to and seasonally adjusted annual rate of 5.48 million homes sold. However, this is 5.4 percent higher than one year ago.
The decrease was largely caused by falling sales in the Northeast region of the country. Existing home sales dropped by 13.8% previous month.
Home sales in the south, on the other hand, rose by 1.3 percent, and current sales are well above year-ago levels.
The decrease in the number of homes sold could be a worrying sign for home buyers, but home sellers should be happy. Right now, home sellers are dictating the market, and buyers are having to settle for whatever they can find.
Home sales have been steadily dropping over the past year, emphasizing the current housing shortage. Until more homes are built, or until more homeowners begin putting their homes on the market, the shortage will continue.
The shortage is also pushing home prices higher, making it harder for home buyers to afford homes they can find.
With mortgage rates holding steady near their current levels, home buyers may want to lock in on purchase a home that fits their needs before it becomes harder to find proper housing.
About Existing Home Sales
Each month, the National Association of Realtors (NAR) tracks the number of homes sold. The existing home sales report is part of this, and it tracks all homes that are not newly built. This includes houses, townhouses, co-ops and condos.
Last month, the total number of homes sold dropped from January’s numbers. This was largely due to fewer homes being made available on the market.
Generally speaking, February is not a popular month for home buyers or sellers. Usually, both want to wait until summer when there’s better weather, fewer holidays and freer schedules, especially for those with children.
One worrying statistic is that home prices have jumped 7.7% from February of 2015, a sizeable jump for just one year. The price jump is largely due to the shortage of homes.
Also, available homes were only on the market for an average of 45 days, down from 50 days in January.
Home buyers are probably having a hard time finding the right home for them. There just aren’t many homes available, especially in many metropolitan areas.
Currently A Seller’s Market
Unfortunately for home buyers, the housing market remains a seller’s market.
Right now, the shortage of homes is driving up home prices. Current homeowners understand that it is a seller’s market, but many don’t want to put their home for sale.
However, February saw a slight improvement in terms of homes available.
The total housing inventory rose by 4.2 percent last month, meaning there were more homes made available in February than in January.
The unsold inventory of homes also rose to 3.8 months. In this fictional statistic, the NAR determines how long it would take to sell every home currently on the market, assuming the current pace of homes sold remains the same and that no additional homes are added to the market.
Of course, this statistic would never be real, but it showed a 0.3 month increase from January, again showing that more homes are being made available.
Home buyers have to make a tough decision: either wait until more homes are made available and hope they aren’t too expensive, or lock in on current rates and find a home as soon as they can.
Current Mortgage Rates
Mortgage rates have been rising gradually for the past few months, and that makes home buying more expensive.
However, current rates are still much lower than they have been historically. Rates are expected to rise throughout the year, so keeping track of rates could help when looking to buy a home.