February Existing-Home Sales Ease From Record
March 26, 2003
WASHINGTON - Sales of existing single-family homes declined last month from a record pace in January, but were still at the fourth highest pace since record keeping began in 1968, according to the National Association of Realtors®.
Existing-home dropped 4.3 percent in February to a seasonally adjusted annual rate* of 5.84 million units from an upwardly revised record pace of 6.10 million units in January. Last month's sales activity was 1.2 percent above the 5.77-million unit pace in February 2002. Other months with higher sales levels were in January and December of 2002.
David Lereah, NAR's chief economist, said the decline was anticipated. "After reaching an unprecedented level in January, it was no surprise to see existing-home sales drop in February," Lereah said. "A disruption in normal buying patterns, resulting from large areas of the country being buried in snow for days on end, may show in later data. Even so, generally strong sales are expected this year assuming the war in Iraq is not prolonged."
NAR President Cathy Whatley, owner of Buck & Buck Inc. in Jacksonville, Fla., said the housing market continues to enjoy the support of historically low mortgage interest rates. "In additional to a strong fundamental demand for housing, economic uncertainty is favoring more stable investments such as homeownership," she said.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was a record-low 5.84 percent in February, down from 5.92 percent in January; it was 6.89 percent in February 2002. Freddie Mac started tracking interest rates in 1971.
The national median existing-home price was $161,600 in February, up 8.2 percent from February 2002 when the median price was $149,400. The median is a typical market price where half of the homes sold for more and half sold for less.
Housing inventory levels dropped 6.6 percent at the end of February with 2.14 million existing homes available for sale, which represents a 4.4-month supply at the current sales pace. In January there was a 4.5-month supply of homes on the market.
Regionally, homes in the Midwest were reselling at an annual rate of 1.30 million units in February, up 4.8 percent from January, and were 3.2 percent above February 2002. The median price in the Midwest was $134,600, up 3.9 percent from a year ago.
Existing-home sales in the Northeast slipped 2.9 percent from January to a pace of 680,000 units in February. The rate was 5.6 percent below February 2002. The median existing-home price in the Northeast was $177,500, up 17.5 percent from a year ago.
Home resales in the West dropped 6.0 percent from January to an annual rate of 1.56 million units in February, but the pace was 0.6 percent above February 2002. The median existing-home price in the West was $207,700, up 5.4 percent from the same month a year earlier.
The existing-home sales pace in the South fell 8.0 percent in February to an annual rate of 2.30 million units, but was 2.7 percent above February 2002. The median price of an existing home in the South was $158,700, which was 14.1 percent higher than February 2002.
Source: The National Association of Realtors