February home resales jump much more than expected, despite higher mortgage rates

Gross sales of beforehand owned properties in February rose 4.2% from January to 4.26 million models on a seasonally adjusted, annualized foundation, in keeping with the Nationwide Affiliation of Realtors. Business analysts had anticipated a drop of three%.

Gross sales have been 1.2% decrease in contrast with February of final yr.

This depend is predicated on closings, so contracts signed in December and January, when mortgage rates have been rising and briefly held within the 7% vary on the 30-year mounted. Rates at present are within the excessive 6% vary.

“Home consumers are slowly coming into the market,” mentioned Lawrence Yun, NAR’s chief economist, in a launch. “Mortgage rates haven’t modified much, however more stock and decisions are releasing pent-up housing demand.”

Gross sales have been solely higher yearly within the highest value classes, above $750,000. Gross sales across the median value have been down 3% yr over yr.

Stock on the finish of February stood at 1.24 million models, a rise of 17% yr over yr, however nonetheless only a 3.5-month provide on the present gross sales tempo. A six-month provide is taken into account balanced between purchaser and vendor.

“We’re nonetheless in a comparatively tight market situation,” Yun mentioned.

That tight provide is maintaining stress on costs. The median value of a home bought in February was $398,400, up 3.8% from the identical time final yr. That could be a file excessive for the month of February. All 4 geographical areas of the nation noticed value will increase.

First-time consumers edged again into the market, making up 31% of February gross sales in contrast with 26% the yr earlier than. Buyers, nevertheless, pulled again, accounting for simply 16% of gross sales, down from 21% final yr.

All-cash gross sales, nevertheless, remained comparatively regular at 32% of gross sales, down simply barely from the yr earlier than. Money is often favored by traders, so this means, given the drop in investor gross sales, that more owner-occupants are utilizing money.

Whereas these gross sales have been higher than anticipated, they’re more indicative of the market two months in the past than they’re now. A separate survey of actual property brokers in February from John Burns Analysis and Consulting discovered more than half of respondents indicated this spring’s resale market is weaker than regular. This resale index dropped for the primary time in 4 months.

“Present gross sales scores stay weak, with 53% of brokers reporting weaker than regular gross sales. That is higher than 56% one yr in the past however decrease than January’s 47%. Affordability constraints and financial uncertainty hold many consumers on the sidelines,” in keeping with the report from John Burns.