The National Association of Realtors and the U.S. Department of Housing and Urban Development reported This Week in Real Estate that existing home sales and new home sales realized month-over-month increases in February. Existing home sales registered the largest monthly increase since July 2020, surging 14.5% past January numbers. New home sales experienced the third consecutive month of growth, improving 1.1% over January. “Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines,” says NAR Chief Economist, Lawrence Yun. Below are a few newsworthy events from the third week of March that influence our business:
Existing-Home Sales Surged 14.5% in February – The Largest Increase Since July 2020. Existing-home sales reversed a 12-month slide in February, registering the largest monthly percentage increase since July 2020, according to the National Association of REALTORS. Month-over-month sales rose in all four major U.S. regions. Total existing-home sales completed transactions that include single-family homes, townhomes, condominiums, and co-ops – vaulted 14.5% from January to a seasonally adjusted annual rate of 4.58 million in February. “Inventory levels are still at historic lows,” Yun added. “Consequently, multiple offers are returning on a good number of properties.” The median existing-home price for all housing types in February was $363,000, a decline of 0.2% from February 2022 ($363,700). This ends a streak of 131 consecutive months of year-over-year increases, the longest on record. Single-family home sales soared to a seasonally adjusted annual rate of 4.14 million in February, up 15.3% from 3.59 million in January. The median existing single-family home price was $367,500 in February, down 0.7% from February 2022. Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 440,000 units in February, up from 410,000 in January. The median existing condo price was $321,000 in February, an annual increase of 2.5%. In the West, existing-home sales rocketed 19.4% in February from the prior month to an annual rate of 860,000. The median price in the West was $541,100, down 5.6% from February 2022. Read the full story here.
Mortgage Rates Continue to Slide Despite Fed Hike. Mortgage rates continued to slide this week, even after recent bank failures failed to stop the Federal Reserve from hiking its benchmark interest rate for the ninth consecutive time. Mortgage rates are following the downward trend of 10-year Treasury yields, which is helping to lift homebuying demand. While the 30-year fixed-rate mortgage averaged 6.42% this week, according to Freddie Mac, mortgage applications to purchase a home rose 2% week over week, the Mortgage Bankers Association reported. Buyers appear ready to act upon movement in mortgage rates. In February, existing-home sales posted their first monthly gain in a year – up 14.5% from January, the National Association of REALTORS reported this week. “Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines,” says NAR Chief Economist Lawrence Yun. All of this news bodes well for a potentially robust spring real estate season. “If mortgage rates continue to slide over the next few weeks, look for a continued rebound during the first weeks of the spring homebuying season,” says Sam Khater, Freddie Mac’s chief economist. Home buyers may benefit from shopping around for the best mortgage rate, given the volatility. Freddie Mac’s research shows that home buyers could potentially save $600 to $1,200 annually by taking the extra time to shop and collect quotes from multiple lenders. Read the full story here.
New Home Sales Rose for The Third Month in a Row. New home sales rose in February, climbing for the third month in a row as mortgage rates eased off their highs of the past year and buyers looked to new construction amid historically low inventory of existing homes for sale. Sales of newly constructed homes were up 1.1% in February from January, according to a joint report from the US Department of Housing and Urban Development and the US Census Bureau. February’s month-over-month gain is further evidence that the housing market may be stabilizing. Sales of new single‐family houses were at a seasonally adjusted annual rate of 640,000, up from a revised 633,000 in January. Mortgage rates in February continued to ease off their 2022 high of over 7% reached at the end of last year. However, they began to climb again at the end of February on concerns of still stubborn inflation. The average mortgage rate for a 30-year fixed-rate loan climbed half a percentage point in February. In a bit of a setback for buyers, prices of new homes rose from January. The median price for a new home rose to $438,200 in February, up from $427,500 the previous month. Read the full story here.
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