Existing home sales for February decreased 0.4 percent to an annual rate of 4.6 million homes sold compared with 4.62 million in January, but the increasing prices of the improving housing market have led to the lowest sales rate since July 2012, according to a report from the National Association of Realtors.
The home sales report published on Thursday showed a stark 7.1 percent drop below the 4.95 million annual sales rate projected in February 2013 as average national home prices in recent quarters increased to levels last seen before the housing crash.
The median price for existing homes in February increased 9.1 percent compared with the previous year to $189,000. Foreclosures, short sales and distressed homes accounted for 16 percent of sales in February, a slight uptick from 15 percent in January, but a marked decrease from 25 percent of home sales in February 2013.
The amount of unsold homes increased in February, rising 6.4 percent to 2 million homes, making for a 5.2-month supply at the current pace of sales, up from 4.9 months in January. Unsold inventory was 5.3 percent lower in February 2013, when there was a supply for 4.6-months of sales. The median time on the market for homes decreased to 62 days in February, compared with 67 days in January and 74 days on market in February 2013.
First-time buyers are also decreasing as the average price of a homes increases but access to credit remains limited and mortgage lending standards remain restrictive, said Steve Brown, president of the National Association of Realtors, in a release. First-time buyers made 28 percent of purchases in February, up from 26 percent in January, but down from 30 percent in February 2013.
“The biggest problems for first-time buyers are tight credit and limited inventory in the lower price ranges,” Brown said. “However, 20 percent of buyers under the age of 33, the prime group of first-time buyers, delayed their purchase because of outstanding debt. In our recent consumer survey, 56 percent of younger buyers who took longer to save for a downpayment identified student debt as the biggest obstacle.”
Winter weather is also being blamed for the drop in performance, as it is for other economic reports for February, Lawrence Yun, chief economist of the National Association of Realtors said in the news release.
“Some transactions are simply being delayed, so there should be some improvement in the months ahead,” Yun said. “With an expected pickup in job creation, home sales should trend up modestly over the course of the year."