MNI DATA IMPACT:US Feb Home Sales Down on Inventories, Prices

U.S. existing home sales dipped in February, weighed down by tightening inventories and rising prices, the National Association of Realtors said Monday.

Sales of existing homes fell 6.6% to a seasonally adjusted annual rate of 6.22 million, down from a revised 6.66 million in January. But sales were still up 9.1% from last February, just before the Covid-19 pandemic rocked the world economy.

Only 1.03 million homes were available for sale at the end of February, down a record 25.5% from one year ago. That inventory would be exhausted in just two months if home buying continues at its current pace, and the average home spent just 20 days on the market in February, a record low that reflects extremely high demand for housing, NAR chief economist Lawrence Yun said.

High demand for housing could subside in the coming months as mortgage rates rise, Yun said, predicting that rates will grow to 3.5%.

LOW INVENTORY

Low inventory is the "reason why prices are rising," Yun said, with the national median home price of USD313,000 up 15.8% from one year ago and all geographic regions posting double-digit price gains.

Still, that figure is likely being skewed higher because people are buying more expensive homes, Yun said.

Sales of homes priced at USD1 million or higher were up 81% in February from one year ago, while sales of homes with a price tag between USD100,000 and USD250,000 were down 11% compared to a year ago.