Existing Home Sales Rose 11.8% in February from the Prior Month

Last week, Wall Street Journal writer Laura Kusisto reported that, “Sales of previously owned homes posted their largest monthly gain since 2015 in February, a sign that lower mortgage rates and more attractive prices are helping to lure buyers back to the market just in time for the critical spring selling season.

Existing home sales rose 11.8% in February from the prior month to a seasonally adjusted annual rate of 5.51 million, the National Association of Realtors said Friday. That was the second-strongest monthly gain in home sales ever.

“Nonetheless, sales volume was 1.8% below where it was one year ago, indicating the market is recovering but to a lower level than 2017 and early 2018. Other continued signs of softness include higher inventory levels and an increase in the days homes are spending on the market.”

The Journal article noted that, “Last year was the weakest for home sales since 2015. Buyers pulled back in the latter half of 2018, primarily due to the shock of rising mortgage rates after an era of ultracheap credit. Interest rates hit nearly 5% in the fall, but the average rate on a 30-year, fixed-rate mortgage over the past week was down to 4.28%, according to data released Thursday by Freddie Mac.

“Still, mortgage rates weren’t the only factor holding buyers back, and many of the other headwinds remain. The housing-market recovery is threatened by high prices, a shortage of starter-home inventory, a volatile stock market, and anxiety about the national political situation, including trade disputes and the partial government shutdown that ended in January.

“Slowing price gains could be good news for home buyers. The national median sale price for a previously owned home last month was $249,500, up 3.6% from a year earlier. But growth has slowed significantly.”

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