Existing home sales were the only segment to buck the rebound trend in January but analysts expected them to play catch up in February as mortgage rates continued to tumble.
And just as we previewed, existing home sales soared in February (up 11.8% MoM – most since 2015 – to 5.51mm) their highest SAAR since March 2018.
Home purchases advanced in three of four regions, led by a 16 percent gain in the West. The Northeast was unchanged.
The median existing-home price for all housing types in February was $249,500, up 3.6 percent from February 2018 ($240,800). February’s price increase marks the 84th straight month of year-over-year gains.
With expensive housing taking a big hit…
Lawrence Yun, NAR’s chief economist, credited a number of aspects to the jump in February sales.
“A powerful combination of lower mortgage rates, more inventory, rising income and higher consumer confidence is driving the sales rebound.”
It was certainly a surge that met rate expectations…
“Without a doubt, the lower interest rates have reignited home-buying interest,” Yun continued…
“This was a very strong pace for home sales.”
However, as Bloomberg notes, it may take some time to determine whether the rebound is sustainable or mainly reflected a boost on pent-up demand from buyers who were waiting for more attractive mortgage rates. Low supplies could act as a constraint on sales, and purchases were still down from a year earlier.
Yun, who has called for more inventory over the course of 2018, says the market would benefit greatly in 2019 with additional new housing.
“For sustained growth, significant construction of moderately priced-homes is still needed. More construction will help boost local economies and more home sales will help lessen wealth inequality as more households can enjoy in housing wealth gains.”
finally, not wanting to rain on everyone’s parade too much, Year-over-year existing home sales were still down for the 12th month in a row…