Washington: The National Association of Realtors released a report on Friday showing a substantial rebound in existing home sales in the month of February – after reporting existing home sales at their lowest level in over three years in the previous month,
NAR said existing home sales soared by 11.8 percent to an annual rate of 5.51 million in February after slumping by 1.4 percent to a revised rate of 4.93 million in January.
Economists had expected existing home sales to surge up by 3.2 percent to a rate of 5.10 million from the 4.94 million originally reported for the previous month.
With the much bigger than expected increase, existing home sales reached their highest level since hitting a matching rate last March.
“A powerful combination of lower mortgage rates, more inventory, rising income and higher consumer confidence is driving the sales rebound,” said NAR chief economist Lawrence Yun.
The report said the median existing-home price in February was $249,500, up 0.1 percent from $249,300 in January and up 3.6 percent from $240,800 in the same month a year ago.
Total housing inventory at the end of February increased to 1.63 million existing homes available for sale, representing 3.5 months of supply at the current sales pace.
“It is very welcoming to see more inventory showing up in the market,” said Yun. “Consumer foot traffic consequently is rising as measured by the opening rate of SentriLock key boxes.”
SentriLock data, for key access to unlock a home, was measurably higher in January and February compared to the second half of last year.
NAR said single-family existing home sales spiked by 13.3 percent to an annual rate of 4.94 million in February, while existing condominium and co-op sales were unchanged at a rate of 570,000 units.
Next Friday, the Commerce Department is scheduled to release a separate report on new home sales in the month of February.
Why Markets Care About Existing Home Sales Also Called Home Resales
Existing Home Sales report is released monthly, about 20 days after the month ends, by the National Association of Realtors (NAR).
It measures annualized number of residential buildings that were sold during the previous month, excluding new construction. While this is monthly data, it’s reported in an annualized format (monthly figure x12).
The Existing-Home Sales data measures sales and prices of existing single-family homes for the nation overall, and gives breakdowns for the West, Midwest, South, and Northeast regions of the country. These figures include condos and co-ops, in addition to single-family homes.
Existing Home Sales is a leading indicator of economic health because the sale of a home triggers a wide-reaching ripple effect. For example, renovations are done by the new owners, a mortgage is sold by the financing bank, and brokers are paid to execute the transaction.