NAR: Feb. Existing-Home Sales Drop 7.2%

By Kerry Smith

Year-to-year, sales declined 2.4%. NAR’s chief economist calls it a “double whammy” for buyers who face rising mortgage rates and sustained price increases.

WASHINGTON – U.S. existing-home sales dipped in February, continuing a seesawing pattern of gains and declines over the last few months, according to the National Association of Realtors® (NAR).

Each of the four major U.S. regions tracked in NAR’s monthly survey saw sales fall on a month-over-month basis. While sales activity year-over-year was also down overall, the South – the region that includes Florida – saw an increase while the remaining three regions reported drops.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – sank 7.2% from January to a seasonally adjusted annual rate of 6.02 million in February. Year-over-year, sales decreased 2.4% (6.17 million in February 2021).

“Housing affordability continues to be a major challenge as buyers are getting a double whammy: rising mortgage rates and sustained price increases,” says Lawrence Yun, NAR’s chief economist. “Some who had previously qualified at a 3% mortgage rate are no longer able to buy at the 4% rate.

“Monthly payments have risen by 28% from one year ago – which interestingly is not a part of the consumer price index – and the market remains swift with multiple offers still being recorded on most properties.”

Total housing inventory at the end of February totaled 870,000 units, up 2.4% from January and down 15.5% from one year ago (1.03 million). Unsold inventory sits at a 1.7-month supply at the current sales pace, up from the record-low supply in January of 1.6 months, but down from 2.0 months in February 2021.

“The sharp jump in mortgage rates and increasing inflation is taking a heavy toll on consumers’ savings,” Yun says. “However, I expect the pace of price appreciation to slow as demand cools and as supply improves somewhat due to more home construction.”

The median existing-home price for all housing types in February was $357,300, up 15.0% from February 2021 ($310,600), with prices higher in all four regions. It’s the 120th consecutive months for year-over-year increases – the longest-running streak on record.

Properties typically remained on the market for 18 days in February, down from 19 days in January and 20 days in February 2021, with 84% of February homes on the market for less than a month.

First-time buyers made up 29% of February sales, an increase from 27% in January, though down from 31% in February 2021.

Individual investors or second-home buyers, who make up many cash sales, purchased 19% of homes in February, down from 22% in January and up from 17% in February 2021. All-cash sales accounted for 25% of transactions in February, down from 27% in January and up from 22% in February 2021.

Distressed sales – foreclosures and short sales – represented less than 1% of sales in February, equal to the percentage seen both month-to-month and year-to-year.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.76% in February, up from 3.45% in January. The average commitment rate across all of 2021 was 2.96%.

Single-family and condo/co-op sales: Single-family home sales jumped to a seasonally adjusted annual rate of 5.35 million in February, down 7.0% month-to-month and down 2.2% year-to-year. The median existing single-family home price was $363,800 in February, up 15.5% from February 2021.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 670,000 units in February, down 9.5% from 740,000 in January and down 4.3% from one year ago. The median existing condo price was $305,400 in February, an annual increase of 10.9%.

“For the past couple of years, buyers have had to contend with a market of high demand, low inventory and a mix of uncertainties with COVID-19 protocols,” says NAR President Leslie Rouda Smith. “Consumers are presently challenged with higher mortgage rates, so now, more than ever, interested buyers need the trusted expertise of Realtors in order to navigate this current market.”

Regional breakdown: Existing-home sales in the Northeast slipped 11.5% in February, registering an annual rate of 690,000 – a 12.7% drop from February 2021. The median price in the Northeast was $383,700, up 7.1% from one year ago.

Existing-home sales in the Midwest sagged 11.3% from the prior month to an annual rate of 1,330,000 in February, a 1.5% decrease from February 2021. The median price in the Midwest was $248,900, a 7.5% climb from February 2021.

Existing-home sales in the South fell 5.1% in February month-to-month, posting an annual rate of 2,790,000 – which was an increase of 3.0% compared to February 2021. The median price in the South was $318,800, an 18.1% jump from one year earlier.

For the sixth straight month, the South experienced the highest pace of price appreciation compared to the other regions.

“Employment is vital for housing demand,” said Yun. “The Southern states are seeing faster job growth, and consequently, it’s the only region to experience a sales gain from a year ago.”

Existing-home sales in the West slid 4.7% from the previous month, reporting an annual rate of 1,210,000 in February, down 8.3% from one year ago. The median price in the West was $512,600, up 7.1% from February 2021.


The Federal Reserve Is Ready To Raise Interest Rates Soon Despite The War In Ukraine

SCOTT HORSLEY Twitter LISTEN· 4:10
Heard on All Things Considered

Federal Reserve Chair Jerome Powell testifies about monetary policy and the state of the economy before the House Financial Services Committee on Wednesday. Powell reiterated the Fed is gearing up to raise interest rates this month.

Federal Reserve Chair Jerome Powell said on Wednesday the central bank is on track to start raising interest rates this month — likely by a quarter percentage point — in an effort to combat inflation, which is the highest it’s been in nearly 40 years.

But the Fed will proceed with caution, Powell told the House Financial Services Committee, as Russia’s invasion of Ukraine adds more uncertainty to the economic outlook.

“The economics of these events are highly uncertain,” Powell said. “So far, we’ve seen energy prices move up further and those increases will move through the economy and push up headline inflation, and also they’re going to weigh on spending.”

The average price of gasoline in the U.S. approached $3.66 per gallon on Wednesday. Rising energy prices have been a significant driver of annual inflation, which hit 7.5% in January – the highest level since 1982.

Powell says it’s too soon to tell on Ukraine

Powell said it’s too soon to know how large or long-lasting price increases tied to events in Ukraine will be, so he and his colleagues on the central bank’s rate-setting committee are prepared to be flexible.

“We’re never on auto-pilot,” Powell said. “Those of us on the committee have an expectation that inflation will peak and begin to come down this year. And to the extent that inflation comes in higher or is more persistently high than that, then we would be prepared move more aggressively.”

Forecasters expect the Fed to impose additional interest rate hikes later this year in an effort to cool red-hot consumer demand, which has outstripped supply and driven prices sharply higher.



read the NPR full article


Rent Prices Growing Faster Than Pre-Pandemic: CoreLogic

Widespread unemployment has not managed to dampen rent growth in most parts of the country

READ FULL INMAN ARTICLE

  • Rent prices across the country rose by 3.7 percent in November, a significant spike from 2.8 percent rise recorded during the same time last year.
  • Single-Family Rent Index report released by CoreLogic on Tuesday, rent growth has picked up and is accelerating at a rapid speed even as the country grapples to control the pandemic. 
  • Due to low inventory, unemployment has yet to make as much of an impact on rental prices as many analysts predicted at the start of the pandemic.


Real Estate Is A People Business: Now More Than Ever

At its core, real estate is about people and the relationships that are created.

Real estate professionals take on the unique responsibility of guiding clients through a highly personal, and often emotional, multi-step process of selling or buying a home. It is a momentous occasion for everyone who’s gone through it. This can easily be overshadowed by the sheer amount of steps it takes to get to the settlement table and close. The constant support throughout the process is your real estate agent.

In this unique reality of Corona virus aka COVID-19, the importance of keeping the focus on people being served will have a greater, longer, lasting effect.

In our professional tool box, real estate agents have technology. We rely on and utilize it on a normal day to make the transaction part of real estate more efficient and convenient for our clients. This current climate is no different. The way in which we use it may vary but the focus remains on the people, first and foremost your safety.

Current industry standards comply with today’s social distancing necessity.

  • The Internet – its global reach to market RE for sellers to buyers
  • Social Media – for marketing and communication ie.GoToMeeting, Zoom, Instant messaging
  • Your phone – text, email, old school calling
  • Virtual tours – ie. Matterport, use of a videographer
  • Electronic signing – ie. DocuSign, Dotloop
  • Real estate apps – 24/7 home searching ie. Homesnap, Redfin, Zillow,
  • Online lender applications
  • Close at home with mobile notary
  • E-signing closing documents (available for sellers and cash buyers)
  • Wiring funds and EMD’s ( wiring instructions should be obtained over the phone directly from the title company only)
  • Online scheduling – options for appointment only at the owners discretion

    Title companies, lenders and insurance companies are listed as essential and are open for business. Together with real estate brokerages, each sector is doing everything they can to cooperate and comply with the safety measures while meeting clients needs.


Paying Someone Else’s Mortgage vs. Your Own

With interest rates at historical lows, it may be a good time to start paying your own mortgage down instead of someone else’s.

As reported by CoreLogic, (the leading provider of property insights and solutions)

2019 Saw the Fastest Annual Rent Appreciation Since 2016 US Single-Family Rents Up 2.9% Year Over Year in December.

Read the full CoreLogic article here

Learn more about the Home Buying Process, start building equity now.

Low rental home inventory, relative to demand, fuels the growth of single-family rent prices. The SFRI shows single-family rent prices have climbed between 2010 and 2019. However, overall year-over-year rent price increases have slowed since February 2016, when they peaked at 4.2%, and have stabilized at around 3% since early 2019. – CoreLogic