U.S. Existing Home Sales Decline Sharply in February with Tight Supply

• Existing home sales decline to six-month low.

• Inventory of unsold homes falls sharply.

• Prices continue to strengthen.

The market for previously owned homes weakened last month. The National Association of Realtors (NAR) reported that sales of existing homes fell 6.6% (+9.1% y/y) to 6.220 million (SAAR) during February from 6.660 million in January, revised from 6.690 million. The Action Economics Forecast Survey expected February sales of 6.50 million. Data are compiled when existing home sales close.

Housing supply continues to decline. The number of homes on the market held steady (NSA) last month but fell 29.5% y/y, remaining at a record low of 1.03 million units. (The figures date back to January 1999.) The months' supply of homes on the market remained near the record low at 2.0 months, below a recent high of 4.6 months in May of last year.

Sales were mixed last month across the country. Sales in the Midwest fell 14.4% (+2.3% y/y) to 1.310 million, down for the third month in the last four. In the Northeast, sales were off 11.5 (+13.2% y/y) to 770,000 units, also down for the third month in the last four. In the South, sales decreased 6.1% (+9.9% y/y) to 2.770 million units after a 3.5% January rise. To the upside, existing home sales in the West rebounded 4.6% (12.3% y/y) to 1.370 million after falling 4.4% in January.

The median price of an existing home increased 3.1% (15.8% y/y) to $313,000 and matched the record set in October of last year. The median home price in the West rose 6.2% (20.6% y/y) to $493,300. In the Northeast, prices eased 1.5% (+20.5% y/y) to $356,000. The median home price in the South improved 3.0% (13.6% y/y) to $271,200. In the Midwest, prices edged 1.6% higher (14.2% y/y) to $231,800. The average sales price of all existing homes rose 1.9% last month (12.6% y/y) to $344,200. The price data are not seasonally adjusted.

Sales of existing single-family homes weakened 6.6% (+8.0% y/y) to 5.520 million units after easing 0.2% during January. Sales of condos and co-ops dropped 6.7% (18.6% y/y) to 700,000 units after January's 2.7% increase.

The data on existing home sales, prices and affordability are compiled by the National Association of Realtors. The data trace back to February 1968. Total sales and price data and regional sales can be found in Haver's USECON database. Regional price and affordability data and national inventory data are available in the REALTOR database. The expectations figure is from the Action Economics Forecast Survey, reported in the AS1REPNA database.